DaimlerChrysler to Cut German Work Force by 6,000 in 2002

AP Business Writer Reports that DaimlerChrysler, already struggling to turn around its money-losing Chrysler unit in the United States, will shrink its work force in Germany by 5,000 to 6,000 workers by the end of next year, a company spokesman said Tuesday.

The reason is a slowdown in its truck and bus business in Europe, said spokesman Mark Binder, citing the company's personnel chief, Guenther Fleig.

The company has eight commercial-vehicle plants in Germany in addition to six passenger car plants.

Binder said the cuts would be made through attrition and that there would be no layoffs. DaimlerChrysler has some 191,000 workers in Germany.

The company, headquartered in Stuttgart and Auburn Hills, Michigan, has launched a three-year turnaround plan for its U.S. arm Chrysler that calls for eliminating nearly 26,000 jobs, closing six or seven plants and selling unnecessary business units.

The Chrysler Group lost $238 million in the third quarter, an improvement over its $517 million loss a year earlier.

While domestic competitors General Motors Corp. and Ford Motor Co. [NYSE:F - news] saw their sales rise dramatically in October and November, mainly through the offer of no-interest financing, sales for Chrysler vehicles rose a modest five percent in October and fell 5.8 percent in November.

DaimlerChrysler has also slashed jobs 700 jobs since the start of the year at its Freightliner truck and bus business headquartered in Portland, Oregon. But Tuesday's statement indicated that the commercial vehicle slowdown has had an effect on its Mercedes-Benz truck and bus operation in Europe as well.

Overall, DaimlerChrysler's truck and bus sales fell to 549,000 in 2000, from 555,000 in 1999. Through the end of September, this year's sales were 366,000 -- on an annual pace to reach only 488,000.

Until now, the European commercial vehicle business had been considered one of the brighter spots in the company's outlook.

``They've actually been holding up OK,'' said auto analyst Krista Kepler at Merck Finck and Co. in Munich. ``But they can't escape the pressure that the economy has been giving them.''

Kepler said investors may give the company credit for tackling the problem immediately with cutbacks rather than waiting.

``This is their attempt to bring everything into a framework that corresponds better to the demand levels that they've been seeing for a while now,'' Kepler said.

DaimlerChrysler stock rose 0.9 percent in afternoon trading on the Frankfurt exchange to 45.76 euros ($41.18).