Ailing car giant installs rescue team

Jürgen Schrempp: leading DaimlerChrysler shake-up

A troubleshooting team has been appointed to revive DaimlerChrysler's US plants, which on Friday ousted a top executive and revealed continuing losses.

Tough market conditions in the US have intensified further

DaimlerChrysler statement

The firm, owner of marques including Mercedes, has appointed German executives to head its US Chrysler arm, which on Friday announced the resignation of president Jim Holden.

The new team will implement a restructuring drive, which will be unveiled early next year, and is designed to "improve cost positioning, product line up and market performance", a company statement said.

Jürgen Schrempp, company chairman, who has noted the success of cost cutting on reviving Nissan, said the move would help "drive the integration of [DaimlerChrysler's] global businesses".

The move follows continuing poor performance at US operations, which reported a record loss of 579m euros in the third quarter of 2000.

'Tough conditions'

Measures including a sales incentive drive, and the launch of the PT Cruiser model, have failed to improve sales, which were 8% lower in October than a year before.

Company profile

Employs 467,000 people (1999)

Revenue of 149.9bn euros (1999)

World's third-biggest carmaker

Owns Mercedes, Smart, Plymouth, Jeep, Chrysler and Dodge

World's biggest commerical vehicle maker

"Tough market conditions in the US have intensified further," Friday's statement said. "As a consequence, results at the group will fall below the last forecast, and thus also affect the earnings of DaimlerChrysler."

Shares in the firm hit a year low of 48.80 euros, 5.7% down, early on Friday over rumours of the warning.

At 1416 GMT, the stock was trading down 3% at 50.22 euros.

'Marriage made in heaven'

The warning will come as an embarrassment to company chairman Mr Schrempp, who oversaw the creation of the firm in 1998 from a merger of US-based Chrysler and Germany's Daimler.

Dieter Zetsche: new man in charge

The company, which he described as a "marriage made in heaven", launched with a share price of 71.20 euros.

But Chrysler has continued to disappoint, with performance dragged down, many analysts believe, by the division's concentration on the US market, and a reliance on its existing jeeps, pick-ups and Voyager models rather than invest in new ranges.

Mr Holden's departure follows a series of resignations by US executives, including his predecessor as president.

Dr Dieter Zetsche, Mr Holden's replacement, is, at 46, the youngest member of the DaimlerChrysler board, and was until Friday head of the firm's commercial vehicles arms.