Bumpy Ride

New York, Feb. 14 (PTI): DaimlerChrysler AG today decided to shed 13,000 jobs from its Chrysler division in the US and Canada as part of a plan aimed at returning the US plant to profitability by 2009.

The automaker will close its Newark assembly plant and reduce shifts at plants in Warren and St. Louis.

A parts distribution centre near Cleveland also will be closed.

The total production capacity of the division will be reduced by 400,000 units per year.

“These actions complement significant other restructuring measures taken since 2001. The company had earlier closed, idled or sold 16 plants — five assembly, 11 component — and reduced its workforce by one-third,” Chrysler group president and CEO Tom Lasorda said.

The “recovery and transformation plan” is aimed at returning to profitability with primary focus on costs, he said.

The plan is structured to over-achieve to offset potential unforeseen market headwinds, resulting in a target of $4.5 billion of financial improvements by 2009, Lasorda said at the DaimlerChrysler AG annual press conference, held in Auburn Hills, Michigan.

Dieter Zetsche, chairman of the board of management of DaimlerChrysler added the Chrysler team worked out a comprehensive recovery and transformation plan using all resources available.

Approximately 100,000 people are expected to lose their jobs in the auto industry as major players make adjustments to cut down their losses, analysts said.

“In order to optimise and accelerate the presented plan, we are looking into further strategic options with partners beyond the business cooperation partners mentioned. In this regard, we do not exclude any option in order to find the best solution for both the Chrysler group and DaimlerChrysler,” Lasorda said.

“There are two integrated parts to the plan — first, the Chrysler group needs to solidify its position in the North American market. In addition, the key to our long-term success will be our ability to transform the organisation into a different company to achieve and sustain long-term profitability,” he said.

The plan will be supported by a $3 billion investment in new engines, transmissions and axles, which will set the table for a product offensive of more than 20 all-new and 13 refreshed vehicles from 2007 to 2009.

Radical stand

DaimlerChrysler dropped its long-standing commitment to Chrysler on Wednesday and said it was prepared to review all its options, including finding new partners for its loss-making US arm.

The announcement by the carmaker just ahead of a news conference in Detroit to outline its turnaround strategy for Chrysler sent the group’s stock up more than 5 per cent to its highest level since June 2002.