Chrysler Group slashes workforce

yesterday announced a three-year Recovery and Transformation Plan that seeks a return to profitability by 2008. The plan will result 13,000 employees losing their jobs between 2007 and 2009.

Chrysler Group President and CEO Tom LaSorda outlined the plan at the DaimlerChrysler Annual Press Conference, held in Auburn Hills, Michigan.

Dr. Dieter Zetsche, Chairman of the Board of Management of DaimlerChrysler said: ‘The Chrysler Team worked out a comprehensive Recovery and Transformation Plan using all resources within DaimlerChrysler.

‘In addition to that and in order to optimise and accelerate the presented plan we are looking into further strategic options with partners beyond the business cooperation partners mentioned. In this regard, we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler.’

According to a statement, the Recovery and Transformation Plan is aimed at a return to profitability with a primary focus on costs. It is structured to over-achieve in order to offset potential unforeseen market headwinds, resulting in a target of €3.5 billion ($4.5 billion) of financial improvements (or a return on sales of 2.5 percent) by 2009.

‘There are two integrated parts to the plan,’ LaSorda said. ‘First, the Chrysler Group needs to solidify its position in the North American marketplace. In addition, the key to our long-term success will be our ability to transform the organisation into a different company to achieve and sustain long-term profitability.’

The program will be supported by a €2.3bn ($3bn) investment in new engines, transmissions and axles which will be incorporated into 20 all-new and 13 modified vehicles from 2007 to 2009.