DaimlerChrysler set to divorce?
The German-American conglomerate may be on the verge of going their separate waysThe tumultuous nine-year relationship between Daimler-Benz (better known as the purveyor of Mercedes-Benz products) and Chrysler may have finally come to the end of the road.
Newspaper reports from Germany suggest that the conglomerate is considering dumping the Chrysler Group in the wake of consistent heavy losses by the US carmaker.
It's clearly not idle speculation as DaimlerChrysler CEO Dieter Zetsche has subsequently conceded that DC is open to all options for the Chrysler group and will explore strategic options with new industrial partners.
"In this regard, we do not exclude any option in order to find the best solution for both the Chrysler group and DaimlerChrysler," Zetsche said at the company's annual press conference to announce financial results at headquarters in Auburn Hills, Michigan, USA.
"This means all options are on the table," Zetsche added.
Meanwhile, the Chrysler group has announced a major overhaul designed to lift it back to profitability. Among the measures proposed are 13,000 job cuts, idling one plant and cutting shifts at others, and cutting annual production capacity by 400,000 units.
Chrysler also hopes to reap savings by rationalising its number of platforms and engine families. It's a similar strategy to the one Nissan CEO Carlos Ghosn used to lift the Japanese carmaker from the financial mire at the turn of the millennium.
In a further shift, the Chrysler group is shifting its focus from light trucks to more fuel-efficient small cars.
The cost-cutting initiatives, which run through 2009, are designed to save the Chrysler group $US4.5 ($5.8) billion and return it to profitability by 2008.
The 1998 merger between Daimler-Benz and Chrysler was the brainchild of former Daimler-Benz boss Jurgen E. Schrempp, who resigned from his position at the end of 2005.
Schrempp's contract actually ran to 2008, but he was blamed for the fall of the company's share price since the merger with Chrysler, and this led to his premature demise.
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