It was revealed today that Chrysler cut its contractor fees by 5 percent for services not related to car production, effective June 1st. The reduction will last for at least one year. About 80 contracts will be affected, for services involving office workers, custodial and information technology services.
In a statement, the automaker said the move is “part of Chrysler ’s ongoing efforts to reduce its cost footprint in a highly competitive marketplace.” Chrysler will allow each supplier to decide how they will achieve the savings, according to company spokesperson Kevin Frazier in an Automotive News report. The numbers of affected workers was not revealed.
The move allows Chrysler to reduce costs without incurring the type of public outcry a pay cut to unionized assembly workers would generate. Put simply, reducing pay to contractors is a heck of a lot easier than slashing hourly pay to UAW workers.
