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SalesDaimlerChrysler to Cut 26,000 Jobs
Posted by mike on 2001/2/2 0:00:00 (695) reads



You've no doubt heard the news by now - DaimlerChrysler has announced that it is going to be cutting 26,000 jobs from its Chrysler division in order to return the American arm of the company to profitability. How is the Jeep nameplate affected by all this - both the Jefferson North (Grand Cherokee) and Toledo (Cherokee, Liberty, and Wrangler) plants will eliminate one shift of workers. Here's a snippet from the CNNfn story:

DaimlerChrysler unveiled Monday its plans to slash 26,000 jobs at its sputtering Chrysler arm over three years.

The reduction of about 20 percent of Chrysler's work force is part of a restructuring plan aimed at bringing the North American division back to profitability. The company also said it will idle six of its 50 worldwide plants through 2002, as well as eliminating shifts or cutting production at another seven assembly plants.

The United Auto Workers union, which represents hourly workers in the United States, had no immediate comment on the closings and staffing cuts. The Canadian Auto Workers union, which represents hourly employees there, said it would work to minimize the impact on its members.

...snip...

The planned shift changes, plant closings and idling of factories will reduce Chrysler's overall output by about 15 percent, the company said. The German-American automaker said 75 percent of the job cuts would be made this year and that the cuts were in line with its union contracts. It also said it believed most of the job cuts will be accomplished through retirement programs, although Dieter Zetsche, Chrysler's new CEO, said there would a need for layoffs, primarily among salaried staff. There would also be some cuts in salaried compensation this year.

Chrysler, the third-largest North American automaker, announced a $512 million loss in its operations in the third quarter last year, and published reports indicate that it lost about $1.25 billion in the fourth quarter. The company has blamed the high cost of launching new vehicles and a competitive U.S. market.As part of Monday's announcement, Juergen Schrempp, the chairman of DaimlerChrysler, issued a statement saying, "I have full confidence in the management team under the leadership of Dieter Zetsche. These measures will substantially help to turn around the Chrysler Group."

But Schrempp has himself been under fire. Billionaire investor Kirk Kerkorian, the largest U.S. shareholder, in November filed an $8 billion lawsuit claiming he was hoodwinked by Schrempp with false promises the deal would be a merger or equals. Kerkorian has sold a chunk of his shares since filing the suit.

How will this affect the launch of the Liberty? So far, there has been no word, which is this case, seems like at least a bit of good news.

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Poster Thread
Anonymous
Posted: 1969/12/31 19:00  Updated: 1969/12/31 19:00
 Originally posted by: dt
While I do think it is foolish that Schrempp spent so much money on aquisitions, I still think it would have been necessary for some kind of restructuring on the Chrysler side. They have kept the vehicle development budget and finally put an end to that dumb idea of renovating the Chrysler building

Poster Thread
Anonymous
Posted: 1969/12/31 19:00  Updated: 1969/12/31 19:00
 Originally posted by: Bob
So, Eric, you think this is all the fault of the
new German management?

If you read David E. Davis's column in the March
issue of Automobile magazine, you will get a
different perspective. D.E.D. believes, as others
do, that the seeds for this current economic
crisis were sowed long before the merger. In fact,
D.E.D. even goes as far as suggesting that Bob
Eaton was well aware of the looming financial
mess, long before the merger took place.

I agree with D.E.D. To put this all on the Germans
is too simplistic an answer. These problems don't
just happen overnight, as one is lead to believe,
if you read the newspapers. There were/are long
deep-seated problems at Chrysler. Only now they're
coming

Poster Thread
Anonymous
Posted: 1969/12/31 19:00  Updated: 1969/12/31 19:00
 Originally posted by: Erik Latranyi
This is a drastic measure that would not have been necessary under the previous management. Schremp and his collegues have squandered the $7 Billion that Chrysler has squirreled away over the past 10 years for just such a downturn in the market. Now that Chairman Schremp has wasted that money on useless acquisitions, he is forced to cut and sell segments.

A novice could manage better.
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