Chrysler to close Delaware plant early, cut jobs
DETROIT (Reuters) - Chrysler LLC said on Thursday it is closing one assembly plant early and eliminating a shift at another, resulting in 1,825 job cuts, following a loss of more than $1 billion for the first half of the year.
The U.S. automaker, now run by Cerberus Capital Management CBS.UL, clarified that Daimler AG (DAIGn.DE) lost 88 million euros ($112.7 million) on its 19.9 percent stake in the automaker during the second quarter under U.S. accounting standards.
That would mean Chrysler, overall, lost $563 million during the second quarter. Combined with its first-quarter loss of $510 million, the company has lost $1.07 billion for the first half.
Daimler had earlier reported a net loss of 351 million euros for its stake in Chrysler for the second quarter under international financial reporting standards before Chrysler reported the 88-million-euro figure on a GAAP basis.
Chrysler, which was acquired by Cerberus in August 2007, said it was working with the United Auto Workers union to review buyout programs at the affected plants.
The company now plans to close the Newark, Delaware, assembly plant and eliminate a shift at its plant in Toledo, Ohio, by the end of December.
The Toledo plant employs about 2,100 people producing Dodge Nitro and Jeep Liberty SUVs.
The Newark assembly plant, which builds the slow-selling Dodge Durango and Chrysler Aspen, was originally set to close at the end of 2009, a move first announced in February 2007 as part of a cost-cutting plan.
With the closure of the Newark plant, Chrysler would not have any hybrid offerings in the market. Hybrid versions of Durango and Aspen, which are built in Newark, are the only two hybrid models that Chrysler has in dealerships so far. Chrysler plans to launch a Dodge Ram hybrid pickup truck in 2010.
Chrysler, whose sales have fallen 25 percent this year, has faced scrutiny over whether it can ride out a steep downturn in U.S. auto sales that many analysts expect to stretch through 2009.
The U.S. auto market has seen demand plunge since then because of a combination of high gasoline prices, tight credit and a weak housing market.
Cerberus, which is aiming to purchase the remaining stake in Chrysler from Daimler, has been in talks with GM GM.N and other automakers about the possibility of the sale of part or all of the company's assets, according to people familiar with the matter.
Chrysler President Jim Press said late on Wednesday that the automaker's steadier cash flow may be why suitors were considering its assets, but he would not say whether the company was in merger talks with GM.
Chrysler, which has released limited financial data since Cerberus acquired it, ended June with $11.7 billion in cash and had earnings of $1.1 billion before interest, tax, depreciation and amortization in the first half of the year.
(Euro=$1.28)
(Editing by Lisa Von Ahn and Brian Moss)
