2023 Author: Eric Donovan | [email protected]. Last modified: 2023-05-21 15:44
DaimlerChrysler has decided on a drastic restructuring course for its ailing US subsidiary Chrysler. By 2009, around 13,000 jobs are to be cut in the USA and Canada.
DaimlerChrysler boss Dieter Zetsche wants to reorganize the ailing US subsidiary Chrysler with further tough cuts and nine years after the merger does not rule out a separation. By 2009, 13,000 jobs are to be cut in the USA and Canada, the car company announced on Wednesday at Chrysler's headquarters in Auburn Hills near Detroit. A Chrysler assembly plant in Newark, Delaware, USA will be closed. From 2008 onwards, the third largest automaker in the USA, which made a loss of more than one billion euros in 2006, will be back in the black. Under the former Chrysler boss Zetsche, 26,000 jobs had already been cut.
After a meeting of the supervisory board, Zetsche stated that in order to “support and accelerate” the restructuring program, further strategic options were being examined, with “no option” being excluded. "Our goal is to find the best possible solution for the Chrysler Group as well as for DaimlerChrysler."
Limited synergy potential
Chrysler CEO Tom LaSorda announced that Chrysler would strengthen its international presence and exploit cost advantages through partnerships. The general works council chairman and deputy chairman of the supervisory board, Erich Klemm, warned of a "financial downward spiral" because of the crisis at Chrysler. "We wanted to ensure that the core of Daimler can be protected from a possible financial downward spiral of the Chrysler Corporation", explained Klemm the strategy of the employees on the supervisory board. It has become clear that the synergy potential between Mercedes-Benz and Chrysler is limited. Against this background, Klemm welcomed the review of various options for Chrysler announced by the Board of Management.
The restructuring costs will amount to up to one billion euros. The costs at Chrysler are to be reduced by 2009 by 3.5 billion euros. The restructuring plan does not expressly provide for closer links between Chrysler and Mercedes-Benz. In corporate circles, however, it was said that the various projects that had already been started and planned would of course continue. Zetsche has repeatedly stated that the cooperation between the corporate parts must become significantly closer.
The stock exchange celebrates
The announcement of the restructuring plan has already been celebrated on the stock exchange. At noon, the share shot up by up to 5.1 percent to EUR 51.75, its highest level since June 2002. “Actually, it's nothing new, but the message smells like a sale and that's a lot positive,”said a trader. One analyst said: "The statement that Chrysler is considering all options has brought imagination to the titles." A sale of Chrysler is just as interesting as a spin-off or a partnership.
The 2006 annual figures of the German-American car company were better than expected. Both the operating profit and the group result increased compared to 2005. The operating profit rose from 5.2 billion euros to 5.5 billion euros. The result was clouded by the loss of Chrysler in the amount of 1.1 billion euros after plus 1.5 billion euros in the previous year. Nevertheless, the group result improved from 2.8 billion euros to 3.2 billion euros. One expects to be able to increase the profitability significantly in the years 2007 to 2009, it said. The dividend should remain unchanged at 1.50 euros per share.
Mercedes star shines
The core brand Mercedes-Benz was able to shine again and increased its operating profit to 2.4 billion euros (previous year minus 0.5 billion euros). The truck division was also strong, earning 2.02 (previous year: 1.6) billion euros. Group sales rose by around two billion euros to 151.5 billion euros. The participation in the aerospace group EADS contributed 649 million to the operating profit. In 2005 it was 757 million euros. The main reason for the decline was the delay in deliveries of the Airbus A380. The number of employees fell in the previous year from 382,724 to 360,385. 166,617 people were employed in Germany. (dpa)
