DaimlerChrysler to restructure

Schrempp's committee will oversee new product strategy

The board of DaimlerChrysler met on Friday to discuss a shake-up of its senior management.

Members of the board reportedly approved a radical plan by Jürgen Schrempp, chairman, to create a new executive committee, according to Reuters news agency.

The committee would oversee many of the group's divisions.

"There is full support from the board," said one source quoted by Reuters.

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

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

DaimlerChrysler will officially unveil its plan at a press conference on Monday to announce its fourth-quarter results.

In control

As part of the plan, Mr Schrempp will take control of the new "executive automotive committee".

Jürgen Hubbert, who currently heads the Mercedes-Benz and Smart passenger division, would serve as Mr Schrempp's deputy.

The committee would oversee the group's Mercedes-Benz and Chrysler divisions.

It would also supervise the group's new product strategy, commercial vehicle activities and the alliance with Mitsubishi, according to an article in the Financial Times newspaper earlier this week.

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 and make it easier to cut costs across the group.

Previous 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.