Sunday, March 26, 2006

DaimlerChrysler to Spend EU1 Bln More to Fix Smart (Update5)

March 25 (Bloomberg) -- DaimlerChrysler AG, seeking to end losses at its Smart division, plans to scrap a four-seater model, integrate the small-car unit and eliminate 300 jobs in Germany, spending 1 billion euros ($1.2 billion).
DaimlerChrysler will focus on the two-seater ForTwo and cut about 40 percent of the workforce at Boeblingen, Germany, near Stuttgart, the company said in a faxed release today. The cuts are in administration, sales and research and development.
``The focus on one model will help us further reduce fixed costs and material costs, which will make sure that we reach and sustain profitability at Smart,'' Marc Binder, a DaimlerChrysler spokesman, said in a telephone interview today.
The moves show that DaimlerChrysler Chief Executive Officer Dieter Zetsche plans to keep the unit that never reached its target of selling 200,000 vehicles a year, defying some investors who wanted the company to sell the division. The world's fifth-largest carmaker in January hired Goldman Sachs Group Inc. to gauge interest from potential buyers.

Photo by Lucy, with thanks to B-J L.

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