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Last Updated: Wednesday, 14 February 2007, 23:54 GMT
Chrysler's troubles from Detroit
Analysis
By Guto Harri
BBC North American business correspondent

DaimlerChrysler is the world's largest commercial truck maker
Chrysler is not the only US carmaker shedding jobs at present

It was a curious day to break such bad news. For those affected, it was cruel.

Valentine's day is a big deal in the United States, and local radio stations in Michigan have been broadcasting sweet and silly greetings all day from eager lovers.

The news that Chrysler is shedding 13,000 staff sounded particularly harsh sandwiched between the special requests for romantic songs.

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Not surprisingly, the unions dubbed it the Valentine's day massacre, and I found a lot of bitter workers turning up for the late shift at the Warren Truck Assembly plant, where 700 of the jobs are to go by July.

The Valentine's Day massacre which is a legend around here happened down the road in Chicago back in 1929.

Seven men shot from behind in a bloody battle between rival gangster mobs. It was blamed on Al Capone.

Kenneth Brune, manager of Warren Truck is no Al Capone but he admitted feeling awkward breaking the bad news to his staff on a day like this. It's fair to say, of course, it was not his decision.

People in Michigan know exactly how losses in the car industry translate into cuts

I drove 50 miles to Chrysler's Headquarters in Auburn Hills to hear the announcement. Traffic was slow on the I-75 heading north of Detroit, and the heavy snow that's fallen here in the last few days made the journey pretty precarious.

There were many accidents on route, invariably involving light cars that had skidded off the Highway. It was a good day to be driving a Jeep.

Have you been affected by changes in the auto industry?

Plan X

Jeep, funnily enough, is one of the proud products of the Chrysler Group.

And Jeep did pretty well last year.

But that group overall made a $1.4bn loss, dragging the parent company, Daimler Chrysler into difficult terrain.

People in Michigan know exactly how losses in the car industry translate into cuts. Ford and General Motors are in the process of ditching around 70,000 workers between them and closing countless plants.

A midget Gem car
Little buggies took journalists to the press centre for the news

Chrysler's re-structuring, known apparently as Plan X, follows a well trodden route in this area.

Their smart sprawling headquarters doesn't look like the offices of a crippled corporation.

Polite, efficient, staff were waiting at reception, ticking off names, handing out press releases, coffee and a packed lunch.

There were little buggies too - known as GEM's - to drive us down the long polished corridors from reception to the press centre.

Only a car company would be driving people through its cafeterias and cloakrooms, I thought. But at an average speed of 10 miles an hour, it took three minutes - so the walk, with camera equipment - could have been hard.

Frustration

The human dynamics on stage were fascinating.

Dieter Zetsche, the German Chairman of Daimler Chrysler, used to run the Chrysler Group here.

His success at the time was one of the main reasons why he ended up with the top job in the parent company. So to return to Michigan to explain why the north American operations are dragging down an otherwise thriving company was pretty grim.

Dieter Zetsche
Dieter Zetsche has refused to rule out a DaimlerChrysler break-up

Tom la Sorda, who now runs the Chrysler group looked pretty uncomfortable beside him and both men seemed to squirm when asked how much longer the Daimler-Chrysler union would last.

Dieter Zetsche can hide a lot behind his bushy moustache and dull delivery. But he couldn't hide his frustration, and he couldn't disguise the fact that there could be a break-up.

He agreed that all options are now on the cards, causing a big stir among the press corps present, particularly the German contingent.

Again, it was a cold, unnerving message to deliver on a day when most partners reaffirm their commitment to each other.


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SEE ALSO
DaimlerChrysler cuts 13,000 jobs
14 Feb 07 |  Business
German call for Chrysler spin-off
12 Feb 07 |  Business
US sales woes hit DaimlerChrysler
25 Oct 06 |  Business
Chrysler to cut car prices in US
20 Oct 06 |  Business

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