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DaimlerChrysler Executives Hold News Conference on Massive Layoffs ExpectedAired January 29, 2001 - 9:00 a.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Want to take you to a news conference being held by DaimlerChrysler, announcing tens of thousands of layoffs.
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UNIDENTIFIED FEMALE: ... the second part, which is the involuntary layoffs. Employees will be given two week's notice individually. And the effective date of that will be March 31.
QUESTION: I just want to ask you one thing. And forgive me if I should know this. Do they -- do people who take the retirement, though, get so many years of a percentage of their pay or something like that also, or is this just a one cash payment and car voucher?
UNIDENTIFIED FEMALE: OK, for the 62-and-above group that you're talking about, the separation incentive program, they would receive what they're eligible to receive. As I mentioned, that group is already eligible today without an incentivized program to retire. So the incentive would be this additional cash payment and car voucher. The retirement benefits would be as the plan states.
UNIDENTIFIED MALE: Excuse me, that pertained to salaried employees, your question, is that correct? Yes, OK.
UNIDENTIFIED MALE: Well, she was just saying employees and we want to be clear that that's for salaried employees.
UNIDENTIFIED MALE: Yes, on the hourly side, just to clarify to Ken's point, we are discussing right now with the union leadership, all of our union leaderships, comparable programs on the hourly side. But we have not finalized those details as we sit here today. But conceptually we're moving in that same direction.
UNIDENTIFIED MALE: Yes, the point -- and I'm trying to pick up on what Keith said and you're saying. You know, the point is, you know, we're going to have a reduction and we're trying to do it the right way for the people. And that's real key, you know, as you print your stories, that the reason that we're going into great detail is we want to do right by the folks -- and that's what we're trying to do -- and minimize, at the end of the day, the number of people that actually have to be laid off to the street.
QUESTION: Keith. Yes, Keith Naughton from "Newsweek." Its clear that the problems at the company are worse than management initially realized. It seems the auto market is slowing faster than anybody in the industry expected it to. I'm wondering if you can rule out absolutely today that you won't need to do this again before Chrysler's turned around?
UNIDENTIFIED MALE: I can clearly say that all what we decided for was based on a very realistic assumption about the market conditions and our near-term future out there. And our clear intention as to what we decided and present to you today, that this is a one-time action. I think there's no economy and no -- or industry in this world where anyone could rule out for ever any repetition of any step of this kind. This kind of security just doesn't exist in the real world. But other than that, our clear intention is to go for one step, which addresses the need and which gives us the base for an upward development for the years to come in order to be a successful company again.
UNIDENTIFIED MALE: Where are the mikes?
QUESTION: Hi, Jeff Ball with the "Wall Street Journal." Two questions, if I could. First, just to clarify the point about the details of the hourly and salaried reductions, are we -- is -- am I understanding correctly that there are 6,800 salaried and contract workers of whom 1,800 are contract? When you said that half of those -- the intention is that half of those would be bought out as opposed to laid off, therefore that's half of the 5,000 so that 2,500 of those salaried would be bought out, the idea is the 1,800 contract workers would be laid off, and then an additional 2,500 contract workers would be laid off? Is that correct?
UNIDENTIFIED MALE: I think it's correct. But, of course, those are assumptions...
UNIDENTIFIED MALE: ... because, again, it depends on the take rate based on the offers we are doing. But this is a rough scenario as we could see it.
UNIDENTIFIED MALE: Nancy Este (ph).
UNIDENTIFIED FEMALE: I think the only thing I want to make sure of is clarify what you said. When we, again, talked about these numbers, speculative at this point because, again, we're not sure who will accept the offers, the 1,800 is the contract workers that would be let go. That number was correct. Of the remaining 5,000, well over 2000-plus will be offered these incentivized retirement programs of the two type I mentioned.
So, again, dependent on that take rate, as I said, we will, well over 50 percent, obtain our objective through special incentivized programs. QUESTION: And on the hourly side, is it also a 50 percent target, in other words, of the -- what is it 19,000? -- about half of those you would hope would take some sort of a buyout as opposed to being laid off?
UNIDENTIFIED MALE: On the U.S. side, Jeff, we have a larger population of eligibles than we do in the salary side. And that was why Dieter said that it would be more difficult on the salary side. We haven't worked the final numbers up for Canada, as I mentioned earlier. But it is going to depend on the take rate. The issue at the end of the day is still going to be how many of our total eligible population accept the special incentive. Point one and point two is we're still detailing that out, so we're not even in a position to communicate exactly what that program's going to look like.
QUESTION: So it would be fair of us to conclude...
KAGAN: We've been listening to executives from DaimlerChrysler Corporation -- they're the folks that make Jeep Cherokee, among other car products you might buy out there -- announcing today that they plan to cut 26,000 jobs from their North American workforce. That's 20 percent of the people that DaimlerChrysler has working for them here in North America.
Chrysler said about 19,000 of those will involve hourly workers; 6,800 will be salaried employees. They're going to get to that number of 26,000 through a combination of retirements, incentives, special programs, layoffs and attrition as well.
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