Saturday, September 16, 2006

Daimler Cuts Full-Year Profit Target on Chrysler Woes (Update7)

By Jeremy van Loon and Barbara Powell
Sept. 15 (Bloomberg) -- DaimlerChrysler AG, the world's fifth-largest carmaker, unexpectedly cut its full-year profit forecast because of a projected $1.5 billion loss at Chrysler in the U.S. in the third quarter. Its U.S. shares fell the most in more than four years.
For the full year, DaimlerChrysler will post an operating profit of about 5 billion euros ($6.3 billion) compared with an earlier forecast of more than 6 billion euros, the Stuttgart, Germany-based automaker said. Chrysler previously expected to lose as much as 500 million euros ($600 million) in the quarter.
Zetsche, who starred in television ads as "Dr. Z.'' this summer to promote Chrysler vehicles, is also spending 3 billion euros to cut 15,000 jobs, including 8,500 at the Mercedes Car Group, which includes the unprofitable Smart car business. Mercedes lost its position as the world's largest maker of luxury cars to Munich-based Bayerische Motoren Werke [BMW] AG last year.
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