Daimler: Expect a Chrysler Profit by 2002
Despite a slowdown in U.S. auto sales, DaimlerChrysler AG plans to announce later this month that its unprofitable Chrysler unit is expected to begin breaking even in the first half of next year, people familiar with the situation told The Wall Street Journal.
The announcement, expected to be made at DaimlerChrysler's (DCX) annual press conference in Stuttgart, Germany, on Feb. 26, will form part of the company's strategy to give investors "milestones" by which they can monitor efforts to turn around the U.S. unit.
Forecasts for Chrysler's return from red ink will be discussed at a DaimlerChrysler management board meeting in Stuttgart this week. They are also likely to be made more specific, possibly advancing the timetable for the unit to break even to the first quarter of next year, one person familiar with the matter said. A return to profitability would mark a major turnaround for Chrysler, which is estimated to have racked up losses of $1.5 billion in last year's fourth quarter.
Chrysler's timetable for recovery is in line with analysts' expectations. But investors are likely to be relieved that the company shares their opinion and is committing itself to a clear turnaround time frame. That would be good news for DaimlerChrysler shares, which have rebounded of late, and for Chairman Juergen Schrempp, who is battling to build credibility in Chrysler's turnaround strategy.
As part of the restructuring, Chrysler has said it plans to slash annual vehicle production by about 15%, cut 26,000 jobs -- or 20% of its work force -- and idle six factories in North and South America by 2002. About half the job cuts will be accomplished by retirements and buyout packages, but thousands of employees will be dismissed.
DaimlerChrysler announced Tuesday that it has reached agreement with the United Auto Workers on a voluntary retirement program for eligible hourly employees.
DaimlerChrysler said the pretax value of the incentive to each eligible employee will be $35,000 -- half to be used toward buying a vehicle and half in a one-time cash payment.
Nate Gooden, the UAW vice president who heads the union's DaimlerChrysler department, said in a written statement that the incentives fit the union's longstanding goal of creating "solid and secure retirements while also keeping good jobs for lower-seniority workers."
Despite a slowdown in U.S. auto sales, DaimlerChrysler AG plans to announce later this month that its unprofitable Chrysler unit is expected to begin breaking even in the first half of next year, people familiar with the situation told The Wall Street Journal.
The announcement, expected to be made at DaimlerChrysler's (DCX) annual press conference in Stuttgart, Germany, on Feb. 26, will form part of the company's strategy to give investors "milestones" by which they can monitor efforts to turn around the U.S. unit.
Forecasts for Chrysler's return from red ink will be discussed at a DaimlerChrysler management board meeting in Stuttgart this week. They are also likely to be made more specific, possibly advancing the timetable for the unit to break even to the first quarter of next year, one person familiar with the matter said. A return to profitability would mark a major turnaround for Chrysler, which is estimated to have racked up losses of $1.5 billion in last year's fourth quarter.
Chrysler's timetable for recovery is in line with analysts' expectations. But investors are likely to be relieved that the company shares their opinion and is committing itself to a clear turnaround time frame. That would be good news for DaimlerChrysler shares, which have rebounded of late, and for Chairman Juergen Schrempp, who is battling to build credibility in Chrysler's turnaround strategy.
As part of the restructuring, Chrysler has said it plans to slash annual vehicle production by about 15%, cut 26,000 jobs -- or 20% of its work force -- and idle six factories in North and South America by 2002. About half the job cuts will be accomplished by retirements and buyout packages, but thousands of employees will be dismissed.
DaimlerChrysler announced Tuesday that it has reached agreement with the United Auto Workers on a voluntary retirement program for eligible hourly employees.
DaimlerChrysler said the pretax value of the incentive to each eligible employee will be $35,000 -- half to be used toward buying a vehicle and half in a one-time cash payment.
Nate Gooden, the UAW vice president who heads the union's DaimlerChrysler department, said in a written statement that the incentives fit the union's longstanding goal of creating "solid and secure retirements while also keeping good jobs for lower-seniority workers."
