Sources Say Chrysler To Make Management Changes

DETROIT February 17, 2004; John Porretto writing for the AP reported that DaimlerChrysler AG is preparing to make changes at the top of its automaking divisions, moving Chrysler's No. 2 executive back to Germany to lead Mercedes-Benz and replacing him with Chrysler's top manufacturing executive, two Chrysler officials said Tuesday.

Chrysler chief operating officer Wolfgang Bernhard is expected to be named to head the Mercedes-Benz luxury brand, according to two Chrysler officials who spoke to The Associated Press on condition of anonymity.

Bernhard is expected to assume his new role May 1, they said. Bernhard, part of the German management team sent to implement a radical cost-cutting plan at struggling Chrysler in 2000, will replace Juergen Hubbert, whose retirement has been expected.

Succeeding Bernhard at Chrysler is expected to be Tom LaSorda, who was named executive vice president for manufacturing in 2001.

LaSorda, in turn, is expected to be replaced by Frank Ewasyshyn, who has been in charge of Chrysler's advanced manufacturing operations.

Those personnel moves and others are expected to be announced Wednesday after a meeting in Stuttgart of the German-American automaker's supervisory board, which is similar to an American board of directors.

The board also is expected to discuss extending the contract of DaimlerChrysler chief executive Juergen Schrempp, whose current pact expires next year, and the approaching retirement of chief financial officer Manfred Gentz.

Schrempp has been a central figure in the $1 billion suit against DaimlerChrysler brought by investor Kirk Kerkorian, who claims Schrempp-led Daimler-Benz engineered a takeover of Chrysler Corp. in 1998, then cheated him out of an acquisition fee by claiming it was a merger of equals.

DaimlerChrysler insists the merger was one of equals and that Kerkorian, whose Tracinda Corp. was Chrysler's largest shareholder at the time, grew disgruntled when the stock price fell.

Testimony in the bench trial ended last week in Wilmington, Delaware. It's not certain when the judge will rule.

DaimlerChrysler said earlier this month its 2003 profit fell sharply as the Chrysler turnaround and a one-time financial adjustment weighed on the bottom line. Chrysler's U.S. market share fell to 12.8 percent last year from 13.1 percent in 2002, and its U.S. sales fell 3.5 percent in 2003.

The company is scheduled to provide a more detailed earnings report Thursday.

Bernhard, who along with CEO Dieter Zetsche has spearheaded Chrysler's turnaround program, will leave the Auburn Hills-based automaker at a critical time. While many cost-cutting targets have been reached, the division this year begins in earnest another key aspect of the revitalization -- introducing nine of 25 all-new or redesigned vehicles planned over the next three years.

Known for his energetic style, Bernhard was to be a key figure overseeing the launches. Now the role will shift to LaSorda, who joined Chrysler from General Motors Corp. in 2000 as senior vice president in charge of powertrain manufacturing.

LaSorda is credited with helping Chrysler achieve marked production improvements in the past couple of years. In particular, Chrysler improved its assembly plant productivity by 8.3 percent from 2001 to 2002, the company's best year-over-year improvement since the data was first tracked in 1989, according to the Harbour Report.

In late rading Tuesday on the New York Stock Exchange