Steve Comments: More BS from the puppet CEO. To Dieter- you are nothing
but a puppet for the bigger idiot Schrempp. When Schrempp said, "...piss on
your-self, you would..."
Dieter Zetsche says profits come before market share, and he is trying to
get the
good products in the studio into the marketplace
sooner and at a lower cost. That's the recipe
for a Chrysler turnaround.
The new chief executive
and president of DaimlerChrysler North
America, on the job for a
month, also told reporters he is looking
for greater opportunities
for Mercedes-Benz and Chrysler to
share parts, components
and architecture, so long as it doesn't
make the cars look or
seem alike.
And though he didn't say
so, his main objective is to save
his boss's job.
How did Chrysler come to
lose an estimated $1.7 billion in
the second half of the
year? Zetsche says the company's
fixed costs were too high
and assumed continued growth
and price increases.
"The reality of the marketplace turned out to be
much different," said Zetsche. "Sales are
only softening now, but we have had pricing
pressure for some time now."
The 47-year-old former head of Daimler's commercial
truck
business said rumors that he is bringing in dozens
more
Germans to replace Americans, and that he is
halting new
vehicle programs, are false. "This would be
stupid," said
Zetsche.
Clash of the cultures
The CEO with the cookie-duster mustache said he has
been greeted warmly by employees, which surprised
him. "I
think the worst thing is uncertainty," said
Zetsche.
He also said he felt there was no clash between
German
and American cultures to worry about. "I have
spoken to
people here, as well as to people at BMW and I
don't
believe it is an issue." Zetsche added somewhat
comically,
"Lee Iacocca was of Italian descent. Bob Lutz is
Swiss.
Francois Castaing is French and Jim Holden is
Canadian.
It is no issue."
That may be wishful thinking, but he is not likely
to dwell on
such matters with the press, the last constituency
he has
spoken with after employees, union reps, dealers
and
suppliers.
Zetsche said the struggling U.S. automaker will
restructure
in six cost and revenue areas, and take an
unspecified
charge next year to help it return to its "lean and
mean''
past.
The restructuring will focus on material, plant and
fixed
costs, as well as investigating all operations for
cost
savings and studying the revenue management and
product strategy side. Details of the plan will not
be
presented until Feb. 26.
"We have it all in place to get back to where we
were, to
become known again as a lean and mean company, a
dolphin among whales and sharks,'' Zetsche said.
Layoffs on the horizon?
Chrysler lost $512 million in the third quarter and
DaimlerChrysler Chairman Juergen Schrempp said in a
letter to shareholders on Monday that the unit
would lose
about $1.25 billion in the fourth quarter. Analysts
don't
expect Chrysler to show a profit next year, either.
Zetsche said DaimlerChrysler will take a charge
next year
as part of the restructuring, but he said it was
too early to
say how much the charge would be. The restructuring
plan
must impress shareholders who have seen the market
value of Chrysler evaporate like gas fumes in
Daimler's
hands, and it must win over analysts who have
knocked
down Daimler's credit rating, making it more costly
to
borrow.
Zetsche's boss, chairman Juergen Schrempp, has also
laid
the tracks for a huge layoff, telling employees
that it is
staffed for a company with a 20-percent market
share, not
the 14.5 percent it currently has. "That analysis
isn't exactly
right," said Zetsche.
Schrempp handed Zetsche not only a financial and
operational turnaround to execute, but a political
morass to
navigate after the chairman blithely told a London
newspaper last month that he snookered Chrysler's
management and organized labor two years ago into
thinking they would be 'equal partners' in the
merger that
was always just one of Daimler's acquisitions to
build
Schrempp's global vision.
About recovering morale at the company after
Schrempp's
now infamous comments, Zetsche simply said, "It
does us
no good to look to the past except to learn from
our
mistakes."
While he says the reason for the merger of the
companies
are as valid today as they were two years ago, he
concedes, "We did not expect problems of this
magnitude."
Zetsche is going to need the help of the United
Auto
Workers to achieve his turnaround. He said he is
meeting
with the UAW and CAW to see where the unions "can
help
the situation." But he quickly added, "We won't do
our
negotiating in the media."
The current UAW contract prevents the company from
selling off operations to raise cash or lower
costs, but an
ambiguous clause allows the automaker to reduce
employment levels if sales drop dramatically. That
could put
the Zetsche in the unsavory position of having to
engineer a
greater sales drop than the market is creating on
its own in
order to pare union headcount.
A scenario that has the UAW smelling blood, though,
is a trade. If the UAW gets a free
hand in unionizing Daimler's non-union Alabama auto
plant and Freightliner truck
facilities, the union may be willing to grant some
concessions on the Chrysler side of the
business.
With regard to incentives, Zetsche, who once ran
sales and marketing for
Mercedes-Benz, said he would like to eventually
restructure incentives to get away from
cash-back and cut-rate leases as the company did on
the Mercedes side.
"But I'm not entirely stupid," says Zetsche. "You
can't make rules today to break
tomorrow."
-------------------------------------------
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
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