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DETROIT, Sep 20 (Reuters) Chrysler Group said it would slash current-quarter production by 24 percent because of a glut of unsold trucks and sport utility vehicles and seek cost savings across the board.

The plans follow a failed summer sales effort by the No. 3 U S automaker, the U S arm of DaimlerChrysler AG, which said it had misjudged changes in the U S auto market and faces a loss expected to reach $1.5 billion in the third quarter.

''We're going to look at the total business,'' Chrysler Group Chief Executive Tom LaSorda told reporters on a conference call.

''We're going to turn over all the rocks.'' LaSorda said Chrysler would also try to reopen talks with the United Auto Workers union aimed at clinching an agreement to cut its $2.3 billion in annual spending on worker health care.

Chrysler had steered mostly clear of the crisis facing the top U.S. automakers until the current quarter, now expected to mark its first loss in four years. Detroit-based rivals General Motors Corp.

and Ford Motor Co. are shuttering more than two dozen plants and cutting more than 75,000 jobs.

Chrysler now plans to cut its second-half production by 135,000 units, a reduction of 16 percent from its prior plans.

Most of the cutback -- about 90,000 units -- will come in the current quarter as Chrysler attempts to reduce inventory and the related financial burden on its dealers.

Chrysler didn't give a vehicle breakdown in the cutbacks, but trucks and SUVs made up 84 percent of its inventory at end of August.

On Friday, DaimlerChrysler had surprised analysts by cutting its 2006 operating profit estimate by about $1.27 billion (1 billion euros) because of Chrysler's weakening sales position.

Chrysler's U S sales fell 8 percent in the first eight months of 2006, double the industrywide drop of 4 percent.

Kam Hon, an analyst with Dominion Bond Rating Service, said Chrysler remained leaner than either Ford or GM, but said its weaker second-half performance could help management try to revive talks on health care concessions with the UAW.

Earlier this month, UAW President Ron Gettelfinger, who sits on DaimlerChrysler's supervisory board, rejected the company's call for concessions on health care of the kind the union had granted to Ford and GM, saying Chrysler was in better shape.

''They have much less excess capacity than GM and Ford because they've come through a restructuring before and are coming from a lower base,'' Hon said.

'BITE THE BULLET' Earlier on Tuesday, DaimlerChrysler Chief Executive Dieter Zetsche told analysts that Chrysler management had misjudged the market by holding out for an inventory-clearing summer sales season based on its revived offer of employee-level pricing.

But Zetsche said Chrysler had been unprepared for the continuing shift in the U S market away from the light trucks and sport utility vehicles that make up 71 percent of its sales.

Zero-percent financing offers by GM and Ford also hurt Chrysler, Zetsche said.

''We were not able to realize our retail sales plan,'' said Zetsche, who was featured in a series of advertisements this summer for Chrysler as Dr. Z. ''The reality is that we fell short of those plans and relatively significantly.'' Chrysler now expects its share of the North American market to slip to 11.7 percent, compared with an earlier forecast of 12.6 percent.

Chrysler dealers had complained that the company's aggressive production targets saddled them with too many 2006 models, forcing some to cut back on new orders.

''We realized that our dealer inventories were increasing and were at pretty unhealthy levels,'' Zetsche said. ''After the disappointing sales in July and August we had to finally bite the bullet.'' Zetsche said he could not yet give an operating forecast for Chrysler in 2007, but said a third of the company's sales would come from new model launches, including the Chrysler Sebring sedan and the Dodge Caliber hatchback.

Zetsche said DaimlerChrysler was still analyzing any one-time charge it would take as a result of its production cuts.

REUTERS DKS BST0437