DaimlerChrysler announced to reduce its work force by 16 percent by cutting 13,000 jobs from total 83,000 employees, at its loss making U.S. unit Chrysler, and plans to sell its loss-making US division, which could unwind the nine year old merger between Chrysler and Mercedes, which made the fifth biggest car maker.
Most of the U.S car makers lost their lucrative American market to rapidly growing Asian rival, biggest car maker G.M, Ford has already announced to reduce their work force, to cut down their internal expenses. The German-US group reported to fall its sale by 7 percent.
Chrysler reported to loss $1.1billion last year after a rise in petrol prices and a dramatic shift in the US market towards smaller, more fuel-efficient cars hit sales of its minivans, pick-up trucks and sports utility vehicles. Some 90 per cent of Chrysler’s sales are in North America.
DaimlerChrysler said that reducing the work force is a part of its restructuring plan, in which it will cull 40,000 jobs and close its 16 plants, by the end of 2009, which accounted to save $3.5 billion.
To compete with the new Asians competitors’ western car maker looking for “further strategic options” in which car giant General Motors is in talks with Chrysler about an alliance designing models together.
As the news spread in the market, Shares of DaimlerChrysler, on the New York Stock Exchange, gained $2.74, or about 4.3 percent, to $67.19.
Source: nytimes
