REPORT: Chrysler to lay off 250 at Detroit engine plant

DETROIT (Reuters) -- Chrysler Group plans to cut 250 jobs at a Detroit engine plant that supplies eight-cylinder engines for its Dodge Durango and Jeep Grand Cherokee sport utility vehicles, The Detroit News reported today.

A spokesman for the United Auto Workers union local which represents workers at the plant could not be reached for comment immediately.

Chrysler Group spokeswoman Michele Tinson declined to comment, but noted the automaker was readying a cost-cutting announcement scheduled for February.

"We're continuing to evaluate all of our options," Tinson said, adding that it was not uncommon for Chrysler to adjust staffing at its plants through the course of the year in response to changing production levels.

Chrysler, the U.S. unit of DaimlerChrysler AG, slowed production of the 4.7 liter V-8 engines made at its Mack I plant in 2006 in response to high inventory levels and a consumer shift away from SUVs in the face of higher gas prices.

The reported layoffs would cut almost a third of the jobs at the Mack I Engine plant, which has employed 780 workers, according to Chrsyler statistics.

Any UAW workers whose jobs were eliminated by a Chrysler cost-cutting move would be eligible to shift into a "jobs bank program" guaranteeing nearly full wages and benefits according to the terms of the union contract that expires this year.

The jobs bank program will be one of the issues taken up in negotiations between the Detroit-based automakers and the UAW when contract talks begin in earnest this summer, executives have said.

The current four-year contract between the UAW and the U.S. automakers expires in September.

Chrysler has also said it is looking to clinch a cost-cutting deal on health care with the UAW before serious negotiations begin on a new master contract.

UAW leadership last year rejected such a deal for Chrysler, after granting similar cost-cutting concessions to General Motors and Ford Motor Co.