Now this is true, Dodge has a future, since most of it's inventory is do for
replacement over the next four years.
-------------------------------------------
Steven St.Laurent
Test Engineer
Test Branch, GSD, MCTSSA
MARCORSYSCOM, USMC
760-725-2506 (DSN 365-2506)
Work:mailto:stlaurents@mctssa.usmc.mil
Home:mailto:saint1958@home.com
-----Original Message-----
From: The Man From Utopia [mailto:tmfu@home.com]
Sent: Monday, December 18, 2000 8:02 PM
To: DML; Neon.Org; NJNE
Subject: DML: DaimlerChrysler Warns of Losses
DETROIT (AP) - DaimlerChrysler AG's leaders told shareholders
Monday just how bad things have gotten at Chrysler in 2000 - and
warned that 2001 might not be any better.
In a letter from chief executive Juergen Schrempp and chief financial
officer Manfred Gentz, DaimlerChrysler indicated the Chrysler division would
post a loss of
about $1.2 billion in the fourth quarter.
They blamed the losses on tough competition and on the costs of
launching several new models. But those factors, along with a
slowing U.S. vehicle market, high incentives and slow sales of key
Chrysler models will be hard to turn around next year.
"In 2001, we believe that the competitive market environment
will continue to intensify and that our underlying financial
performance, particularly in the United States, will reflect
this," they wrote. "We will face a year even more challenging
than 2000."
Schrempp and Gentz didn't give specific figures for a fourth-quarter loss,
but said that Chrysler's operating profit for
all of 2000 would shrivel to 500 million euros, or $445 million.
Reacting to the bad news, shareholders drove the share price
down $1.24 to $42.25 in afternoon trading on the New York Stock
Exchange.
Chrysler had a busy year, launching new models of minivans and
midsize cars that account for about 40 percent of its volume. Such
launches are expensive, as companies pay to ramp up production,
advertise the new vehicles and hike up rebates and cheap loans to
clear out old models.
During its last minivan launch in 1995, Chrysler ran short of minivans. This
time, the company kept production of the old models
high, even as the new ones were being built. But since 1995, the
market for minivans has become far more competitive, and the old
models have not kept up.
The result: Chrysler had a glut of old minivans and had to jack
up incentives, one of the main reasons it lost $512 million in the
third quarter. Demand for the new models has suffered - sales were
down 16 percent in November. The efforts also took money away from
advertising the new midsize sedans and coupes.
Next year, Chrysler will introduce a new small sport utility, the Jeep
Liberty, and new versions of its Ram pickups. Those new
vehicles should account for about 27 percent of its total volume -
still higher than the ideal of 18 to 20 percent, said Prudential
Securities analyst Michael Bruynesteyn.
"Other companies, like Ford, have a much more stable cadence"
in rolling out new vehicles, he said. "It's going to be tough for
them - just like this year, they've got two big launches."
Along with minivans, Chrysler faces a mounting number of competitors for the
sport utility vehicles and trucks it used to
rely on for most of its profits. General Motors, Ford, Toyota all
have new pickups and SUVs. Next year GM and Ford will bring new
versions of their popular midsize SUVs - the Ford Explorer and
Chevrolet TrailBlazer - which will also put pressure on Chrysler's
SUVs.
On top of all this, customers are starting to pull back from the
auto industry after two record years for sales. Most forecasters
have pushed their predictions for 2001's total sales below results
from this year and last. The traffic of customers at dealerships is
down 15 percent this month, according to Art Spinella of CNW
Marketing Research, while traffic at used dealerships is up - both
signs of a slowdown.
"The pattern is decline throughout next year as the industry heads back
toward the trend of the past few years," said Van
Bussman, DaimlerChrysler's chief economist.
While the warning on profits was not a surprise, some analysts
suggested that new Chrysler president Dieter Zetsche will make the
quarter look worse than it actually is.
"There is a political element to the figures," said Juergen Pieper, an auto
analyst at Metzler Bank in Frankfurt. "Zetsche
wants to make sure the situation at Chrysler looks as bad as
possible to give him plenty of room to show improvement in the near
future."
The Chrysler losses will also hammer DaimlerChrysler's overall earnings for
the year, they warned. Corporate operating earnings
should come in between $8.4 billion and $8.9 billion, including
one-time effects that account for $4 billion, Schrempp said.
As part of its rebound plan, DaimlerChrysler said Monday that it
would replace 80 percent of its fleet over the next five years by
launching 60 new models.
The company also said it would cut costs by sharing more parts
between the company's divisions "where appropriate." At Chrysler,
Schrempp said the new management team will have to cut production
to keep in line with weakened demand.
---Greg NE #3779 2K1 Dodge Neon ES Rahway NJ ICQ# 283886 http://24.6.89.18/Neon
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