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Friday, 12 October, 2001, 16:59 GMT 17:59 UK
DaimlerChrysler cuts truck jobs
Freightliner trucks and commercial vehicles
Freightliner has been losing money in a tough US market
DaimlerChrysler has laid out its plans to turn around its faltering Freightliner truck division, laying out a plan to return the subsidiary to profitability by the end of 2002.

But it will come at some cost. To reduce costs by some $850m (586m), Freightliner plans to shed 2,700 jobs and close three North American plants.

"This multi-faceted restructuring programme shows that we have acted quickly and decisively to bring Freightliner back on the road to recovery and profitability," said Eckard Cordes, the DaimlerChrysler boardmember in charge of commercial vehicles.

Sixteen hundred factory workers and 1,100 salaried employees will lose their jobs. DaimlerChrysler will take a $330m charge against profits this year to pay for the cost of shutting plants and laying off employees.

Question of costs

"The question actually is how much of the cost savings will they be able to retain," said UBS Warburg analyst Xavier Gunner.

Some analysts believe the loss-making division could cost the company up to 1bn euros ($910m, 627m) this year.

Freightliner is the third in a string of financial woes to strike DaimlerChrysler. It has also struggled with severe losses at its Chrysler Group division and Japan's Mitsubishi Motors.

The decision hits Canada especially hard, calling for the shuttering of Freightliner manufacturing facilities in Woodstock, Ontario, and Kelowna, British Columbia by the end of this year.

A third parts plant in Portland, Oregon, is slated for closure next year.

Freightliner markets its truck products under the Freightliner, Sterling and Western Star brands.

See also:

10 Oct 01 | Business
Daimler challenges record EU fine
16 Sep 01 | Business
US motor industry suffers shortages
20 Jul 01 | Business
DaimlerChrysler beats expectations
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