The job losses come as Chrysler majority owner Cerberus Capital Management LP is in talks with General Motors Corp. and the Renault SA-Nissan Motor Co. alliance about a possible merger or other combination. David Cole, chairman of the Center for Automotive Research in Ann Arbor, said it was unclear whether the cuts are only a reaction to the dramatic decline in vehicle demand, or a move to make Chrysler leaner and more attractive for a potential sale or merger. 'It's hard to tell, but they would be consistent with a merger,' he said. A person familiar with the situation said the Cerberus-GM talks have intensified in recent days and that GM had been scrutinizing Chrysler's pension plan obligations. The source cautioned, however, that a deal could still fall apart and that Renault-Nissan, which is interested in a stake of about 20 percent of Chrysler, remains in the running. Whether or not a deal is reached, Chrysler Chairman and CEO Robert Nardelli described conditions in the market as 'truly unimaginable times for our industry,' in a letter to workers announcing the cuts. He said the global financial crisis had led to a contraction of auto sales at 'such a fast rate' that it is forcing the automaker to right-size operations. Chrysler sales are down 25 percent through September, the worst of any automaker, while the overall market is down 13 percent. 'We cannot operate as we have in the past,' Nardelli wrote in the letter, and he gave the strongest indication yet that significant changes are coming at Chrysler. 'In the near future, we will be making organizational announcements as a result of restructuring actions reflecting the need to find new ways to operate.' Michigan officials began developing a rapid response plan Friday to help employees after Chrysler sent notification of the job cuts to the Michigan Department of Labor and Economic Growth, as required by federal law, said deputy director Andy Levin. The governor's office was already bracing for the worst in anticipation of a Chrysler merger, said Liz Boyd, spokeswoman for Gov. Jennifer Granholm. The governor has not been briefed by the leaders of the companies, but she has asked that they keep her informed, Boyd said. In the meantime, the governor has solicited the help of other states in lobbying efforts for an additional $25 billion in federal funding to help the industry, recognizing that access to cash has become crucial and difficult, Boyd said. Chrysler is not alone in cutting jobs. GM this week said it will lay off salaried workers for the first time in about 20 years and slash benefits. On Friday, Ford Americas President Mark Fields and Chief Financial Officer Lewis Booth told employees in a Webcast that there are no immediate plans for more salaried layoffs. They said Ford has enough cash, but is monitoring the market and will react as needed. But other Ford sources told The Detroit News that more salaried cuts are likely, though they will not come before Ford reports third-quarter earnings next month, when the company is expected to give an update on liquidity and other business issues. The automakers are shedding blue-collar jobs as well. United Auto Workers President Ron Gettelfinger acknowledged Friday that he was in discussions with the Big Three as they grapple with the worst auto sales market in 15 years, but he declined to provide details. On Thursday, Chrysler said it would cut 1,825 more factory jobs, and GM has moved up the closings of some plants. The Chrysler salaried cuts affect workers at four locations: Chrysler's headquarters/technology center in Auburn Hills, its Plymouth Road office in Detroit and proving grounds in Chelsea, and a Mopar parts supply center in Macomb County, according to the notice sent to the state. The targeted reductions cannot be achieved without layoffs, company officials said. The automaker also is slashing other costs, with a focus on cutting overhead and discretionary expenses not connected to major product programs, said Chrysler spokeswoman Shawn Morgan. She could not say if the overall product capital budget will be reduced. In his letter to employees, Nardelli said voluntary severance programs will be available starting in November, and take effect Nov. 30. Involuntary measures would follow, taking place by year's end. Employees began receiving details of three packages, including a rare cash buyout option. The packages, which are broader than in the past, vary by years of service but could pay workers up to $50,000 with a vehicle voucher and full health care. In an unusual step, Chrysler is offering buyouts to employees with less than 10 years as of Nov. 30. They can leave with $50,000 in cash, a voucher worth $25,000 toward the purchase of a vehicle and six months of health care coverage. Employees with more than 10 years who are not eligible for separation or early retirement programs can leave with $75,000, the vehicle voucher and six months of health care coverage. That program is being offered for the first time since 1991 -- previously considered the worst year ever for the domestic auto industry, with reported Big Three losses of $7.5 billion. While the programs have been enhanced, layoffs are considered inevitable. Chrysler last announced 1,000 white-collar cuts in July, an action that was completed at the end of September, but which required 15 percent to 20 percent involuntary cuts to reach the company's goal. You can reach Alisa Priddle at (313) 222-2504.2738 or apriddledteom.