Chrysler denies revamp to be unveiled Monday

FRANKFURT, Sept 7, 2003; Reuters reported that the U.S. Chrysler arm of German automaker DaimlerChrysler AG (XETRA:DCXGn.DE - News) on Sunday denied a newspaper report that said its chief would present a plan outlining cost-cutting measures including white-collar job cuts to a board meeting in Germany on Monday.

The Detroit News reported on Sunday that Dieter Zetsche, head of the group's loss-making U.S. Chrysler unit, would present his latest turnaround strategy at a board meeting on Monday ahead of the Frankfurt Auto Show.

The paper said a major shake-up in Chrysler's sales and marketing operations was imminent and that white-collar layoffs were a distinct possibility.

"The news characterization of what is going to happen this week at a board meeting is not accurate," said a Chrysler spokesman.

A DaimlerChrysler spokesman in Stuttgart was not immediately available to comment.

A source close to the situation said the overall situation at Chrysler would be discussed at the board meeting, but there was no plan for Zetsche to make a major presentation on imminent action.

Chrysler is battling to return to long-term profits after posting a 948 million euros operating loss in the second quarter.

It has reduced its work force by about 20 percent and cut costs elsewhere in the organization in the last two and a half years but faces a price war in the U.S. market and few analysts expect it to achieve its target of posting a small operating profit this year.

Some analysts say further restructuring at Chrysler may be unavoidable given the tough environment.

There has already been upheaval at Chrysler's sales and marketing operations. At the end of May, Joe Eberhardt took over responsibility from Jim Schroer there. Last week, Chrysler announced a new program of incentives on vehicles which it described as "aggressive."