WRAPUP 5-GM, Chrysler cut costs, global auto outlook dims

* GM, Chrysler cut jobs, costs as downturn deepens

* Daimler lowers 2008 outlook, Fiat warns on 2009

* Hyundai aims to meet 2008 target, sees fewer unit sales
(Adds details on GM, Chrysler plans; JCI, Renault results,
changes dateline from MILAN/FRANKFURT)

By Poornima Gupta and Christiaan Hetzner

DETROIT/FRANKFURT, Oct 23 (Reuters) - General Motors Corp
(GM.N) and Chrysler LLC took steps on Thursday to cut jobs and
close plants as automakers from Europe to Asia forecast a deeper
global downturn in auto sales.

At the eye of the storm, GM and Chrysler, still discussing a
merger that could combine the struggling automakers, were forced
to cut costs more aggressively than had been anticipated to
survive the sweeping economic downturn analysts see as
threatening both automakers' survival.

"The global credit crisis has had a dramatic impact upon the
industry at large and new vehicle markets in North America and
Western Europe have contracted severely," GM Chief Executive
Rick Wagoner said in a letter to employees.

Results from Germany's Daimler (DAIGn.DE), South Korea's
Hyundai Motor (005380.KS) and Fiat in Italy (FIA.MI) added to
the gloom facing the automotive industry as recession clouds
spread throughout the developed world.

Facing a U.S. market expected to tumble near 18-year lows in
October, GM said it faced "an increasing need to conserve cash"
and would begin dismissing salaried and contract staff as it
also cuts benefits, like matching payments to 401(k) plans.
[ID:nN23432910]

Chrysler, the No. 3 U.S. automaker and owned by Cerberus
Capital Management, said it would close a Delaware SUV plant a
year earlier than planned, cutting 1,825 jobs, after posting a
loss of more than $1 billion in the first half. [ID:nN23426891]

GM and Chrysler are in talks about a cost-saving merger
[ID:nN22405069] that could also present Daimler a key
opportunity to unload its 19.9 percent Chrysler stake which cost
it 1.05 billion euros in the first nine months of the year.

"These are extraordinary and unprecedented times," Daimler
Chief Executive Dieter Zetsche told investors during a call,
citing hits to its sales, revenue, margins and order book.

The maker of Mercedes-Benz cars and the world's biggest
truckmaker lowered its expectations for the year and said its
own forecasts were guesswork.[ID:nLM409440]

"The (Daimler) figures are even below our very cautious
estimates. Provisions for lower residual values and lower margin
targets at Mercedes Benz cars are also surprisingly weak," said
DZ Bank analyst Michael Punzet.

Fiat said global demand for its products could drop 10 to 20
percent and its profit could tumble by as much as 65 percent in
a "worst-case" scenario. [ID:nN22405189]

At Hyundai, South Korea's top car maker, an official
expected emerging-market demand to fall next year.
[ID:nN22405189]

In Paris, Renault (RENA.PA) posted a 2.2 percent drop in
third-quarter sales, blaming a sharp fall in European markets in
the second half. It also declined to repeat existing guidance
for 2009. [ID:nLN681441]

"The crisis is well and truly here, and it's touching
Renault," Chief Operating Officer Patrick Pelata said. But he
said cost-cutting measures would position the group to weather
the storm, and be ready for a rebound -- in 2011 or 2012.

Global carmakers face a sharp drop in sales as consumers put
off major purchases on fears of a recession and credit becomes
more expensive or unavailable. [ID:nN09305152]

Widespread production cuts are also pushing parts suppliers
to the brink and forced German diversified conglomerate
Rheinmetall (RHMG.DE) to also lower guidance on Thursday due to
plummeting orders for pistons, valves and oil pumps.

Johnson Controls Inc (JCI.N), a major U.S. supplier, saw its
profit almost wiped out by a restructuring charge and repeated a
forecast for its first full-year earnings in 18 years amid
deepening uncertainty for the sector and the economy.

"I think it's ... a North American recession and a consumer
confidence that's causing us to try to sit here and guess what
that could mean," Johnson Controls CEO Stephen Roell said.
"That's the one that's probably on everybody's mind -- where's
the consumer going to be for the next year?"[ID:nB23426362]

GM, like other U.S. automakers, has faced increased scrutiny
of its cash position as the market tightens. In a move that will
force further charges in the future, GM's union at an SUV plant
in Ohio approved a deal including payouts and early retirement
benefits to close the plant. [ID:n23386492]

SLOWDOWN HITS EUROPE

The U.S. auto market has been in sharp decline for almost
half a year, but the slowdown has only recently emerged in
Europe, and Thursday's reports were the first look at how tough
conditions have become for a manufacturing sector that is
traditionally one of the hardest hit by recession.

Five-year credit default swaps on Fiat were about 140 basis
points wider at 992 basis points, a trader said, concerning
investors. [ID:nLN585636]

Hyundai, the world's No. 5 automaker along with affiliate
Kia Motors Corp (000270.KS), posted a 38 percent fall in
third-quarter net profit. Although it beat expectations, its
outlook was gloomy.

"The market situation in emerging countries is much worse
than expected," Park Dong-wook, a director at Hyundai's treasury
division, told reporters.
(Additional reporting by Cheon Jong-woo in Seoul; Writing by
Gilles Castonguay, Erica Billingham, Andrew Callus; Editing by
Patrick Fitzgibbons and Matthew Lewis)