DaimlerChrysler shake-up

Schrempp's committee will oversee new product strategy

DaimlerChrysler is reportedly planning to shake up its senior management and create a new executive committee to oversee many of the group's divisions.

The changes are part of the German-US car maker's programme to cut costs and reverse a fall in underlying profits, reports the Financial Times newspaper.

The company is also said to be looking at 8,000 layoffs within its Mitsubishi Motors workforce of 65,000.

As part of the same plan, it is closing two car factories and temporarily shutting down production at several others, according to the German magazine WirtschaftsWoche.

Jürgen Schrempp, chairman of the company, will take control of the new "executive automotive committee".

The committee would oversee the group's Mercedes-Benz and Chrysler divisions, as well as new product strategy, commercial vehicle activities and the alliance with Mitsubishi, writes the FT.

The new centralised committee would replace a previous system of management with separate automotive, sales and marketing councils.

It would also streamline the group's decision-making process.

Details of the revamp are set to be released with the company's full-year results next Monday.

Job cuts

Last month the group confirmed it was cutting 26,000 jobs - equivalent to one in five of its workforce - in a drive to pull out of the red.

Six plants, mainly in South and Central America, will be mothballed next year, with shifts cut at some US and Canadian factories, the firm said.

The announcement came at a difficult time for major US carmakers, all of which have reduced output in response to shrinking sales and growing competition from Asian and European rivals.

DaimlerChrysler has announced preliminary figures showing a 49% fall in underlying profits to 5.2bn euros ($4.8bn) for last year.