The supervisory board of
DaimlerChrysler AG met Friday to weigh what are reportedly radical
reforms at the automaker's troubled Chrysler division and
Mitsubishi Motors Corp. affiliate.
The plans will be officially unveiled during a news conference
Monday at which the world's fifth-biggest auto company is also
expected to detail fourth-quarter losses at Chrysler that could
double the division's $512 million loss recorded for the third
quarter.
The plans, which are reported to include as many as 8,000
layoffs at Mitsubishi, a management shakeup across the company and
a mandate for greater parts sharing between Chrysler, Mitsubishi
and Mercedes-Benz, are expected to win approval Friday from the
company's 20-member non-executive supervisory board.
DaimlerChrysler spokesman Michael Pfister has refused to give
details of the makeover before Monday. As speculation swirled about
the reform plans, investors sent DaimlerChrysler shares falling
3.29 percent to 52.90 euros ($48.14) in midday Frankfurt trading.
DaimlerChrysler launched its restructuring plan last month,
saying it would slash 26,000 jobs, or one-fifth of its work force
at its U.S.-based Chrysler division, over the next three years and
idle six Chrysler plants.
Since then, German and Japanese news reports have said
Mitsubishi, which is 34 percent owned by DaimlerChrysler, is coming
under pressure from Stuttgart-based DaimlerChrysler to eliminate
some 6,000 to 8,000 of its 65,000 workers worldwide, scrap about 10
of its 24 passenger car models and close one or two factories.
DaimlerChrysler will also overhaul its management, introducing a
new "executive automotive committee" to oversee the group's
Mercedes-Benz, Chrysler and commercial vehicle divisions, as well
as its alliance with Mitsubishi, according to The Financial Times
Deutschland.
The committee, to be headed by chief executive Juergen Schrempp,
would replace the current system of separate automotive, sales and
marketing councils. It would also cement Schrempp's power over the
group, the newspaper said.
Meanwhile, DaimlerChrysler's supervisory board is expected to
review plans to put Mercedes engines in some Chrysler models for
the U.S. market, according to the Wall Street Journal Europe. That
move would be a dramatic departure from the company's long-held
philosophy of keeping brands separate and distinct.
While it could help the company squeeze extra savings and give
the Chrysler brand a boost, critics worry it could dilute the
Mercedes mystique — and make people less willing to pay more for a
Mercedes when they can get similar quality from lower-priced
Chrysler.
