Chrysler to outsource hundreds of computer jobs

By TIM HIGGINS • FREE PRESS BUSINESS WRITER • April 2, 2008

Several hundred computer workers at Chrysler LLC will lose their jobs in a move announced today by the automaker to outsource computer system support and maintenance.

Chrysler information technology workers were told today that the company has signed agreements with Tata Consultancy Services and Computer Sciences Corp. for the firms to maintain and support mainframe, servers and corporate computer applications, Jan Bertsch, Chrysler vice president and chief information officer, told the Free Press in an interview.

"This is not just putting work with another supplier to reduce cost, we thought a year ago that rather than try to cost-cut continually over time, we wanted to step back and look at our business and say, 'Where do we really need to move to service our customers better?'" Bertsch said. "What we determined was that we were spending too much of our base budget on core maintenance of our systems and not enough in reinvesting in our business."

Bertsch declined to say how much money the move will save the automaker other than to say, "We would have never embarked on this scale of a project had the savings not been substantial."

Chrysler is beginning immediately on the project and hopes to have it done by the end of the third quarter.

The automaker has about 2,100 people handling the work presently -- of which around 1,000 are full-time Chrysler employees and the rest are supplemental workers on contract.

About 20% -- about 200 -- of the 1,000 full-time employees will lose their jobs because of the change, she said.

The company is not saying how many of the supplemental contract workers will lose their jobs in the switchover other than to indicate it will be several hundred. "It won't be the entire group but it will be more substantial than the salaried," she said.

"Some people will stay, some people will leave and some people will be interviewing with the new provider and perhaps be offered a position with them," she added.

Chrysler officials wouldn't say how much money the new providers will pay.

Chrysler has already had a relationship with Tata. Earlier this year, Chrysler signed a new deal with Tata to do computer work in sales, marketing and shared services as part of a multiyear contract reportedly worth $120 million.

Contact TIM HIGGINS at 313-222-8784 or thiggins@freepress.com.