DaimlerChrysler Announces 26,000 Employee Workforce Reduction
DaimlerChrysler AG (Berlin, Germany) announced a workforce reduction of 26,000 jobs for its ailing Chrysler unit over the next three years, which failed to restore investor confidence in the group's battered stock.
In a statement, the German automaker said it would reduce the workforce at its US unit by 20 percent, through a combination of retirements, special programs, layoffs and attrition, with 75 percent of the cuts coming in 2001. Six Chrysler plants will be idled over the next two years and all facilities will set new quality and productivity targets to improve efficiency and reduce costs. Overall capacity will be cut by 15 percent.
Today's actions will help remove the uncertainty many of our employees have been feeling," said Chrysler Group President and CEO Dieter Zetsche. "Part of this process may be painful for many people. However, to be truly competitive in today's auto industry environment, we need to be a more nimble company, more closely aligned with current and future market conditions."
DaimlerChrysler said it would announce further details of its restructuring plan, and its financial implications, on February 26, 2001, when it reports full-year results. The company is also expected to try to cut costs through platform consolidation between Chrysler and the company's Japanese partner, Mitsubishi Motors Corp., in which DaimlerChrysler has a 34-percent stake.