DaimlerChrysler Group President and CEO Tom LaSorda (left), Ford Chairman and CEO Bill Ford (centre) and General Motors Chairman and CEO Rick Wagoner greet each other on stage at the start of the North American International auto show black tie charity preview held in Detroit, Michigan earlier this month. - REUTERS
BERLIN (AP):
AUTO MAKER Daimler-Chrysler AG said Tuesday that it would cut administrative staff by 20 per cent worldwide over three years, dropping 6,000 jobs in order to save some US$1.2 billion a year, and make the company leaner and more profitable.
Chief Executive Officer Dieter Zetsche said the streamlining would boost growth and profits by removing layers of management and improving co-operation between its divisions, especially Mercedes and Chrysler. Some 60 per cent of the jobs to be cut would be in Germany, he said.
"Our objective in taking these actions is to create a lean agile structure, with streamlined and stable processes that will unleash DaimlerChrysler's full potential," Zetsche said in a statement. "We're going to build on a strong product portfolio."
PLANNED ELIMINATION
The cuts would amount to 30 per cent at the management level and would cover areas such as accounting, auditing, personnel and strategic planning. The downsizing would cost the company around US$2.4 billion in restructuring costs from 2006 to the end of 2008.
DaimlerChrysler shares gained more than five per cent to 44.67 euros (US$54.68) in Frankfurt trading. Its U.S. shares rose US$2.46, or 4.7 per cent, to $54.70 in morning trading on the New York Stock Exchange.
The plan envisions elimination of administrative jobs that duplicate work at the corporate and production level, the company said.
Underlining its emphasis on a sharper focus on manufacturing functions, top management will leave the landmark office tower in the Moehringen district of Stuttgart and move to offices at the production facilities in the city's Untertuerkheim district in order to be physically closer to the assembly line.
The company's other headquarters will remain in Auburn Hills, Michigan.
CUTS BY FORD GM
The DaimlerChrysler announcement came a day after Ford Motor Company, the second biggest America automaker, said it was cutting up to 30,000 jobs and closing 14 facilities by 2012.
Ford had previously indicated it was cutting about 4,000 salaried positions by the end of the quarter.
General Motors Corp., the world's biggest automaker, announced a restructuring plan in November that will shave its work force by 30,000 and close 12 North American facilities.
Taken from the Gleaner's Wednesday Business, January 25, 2006
