casper
11-05-2009, 08:14 AM
Chrysler pitches turnaround plan
By Jo Winterbottom and Michael Shields
DETROIT/FRANKFURT - The mood in the global automotive industry has shifted to cautious optimism, marked by the unveiling on Wednesday of Chrysler's turnaround plan and General Motors' plan to keep its Opel unit.
However, automakers were in no mood to celebrate a potential recovery and continued to slash costs, with Toyota Motor Corp announcing on Wednesday it was quitting Formula One motor racing and Daimler AG moving to cut 1,000 jobs at its Mercedes-Benz division.
A year of turmoil has reshaped the auto industry and those relying on it.
Optimism abounded in the Detroit suburb where Chrysler is based, however, as Fiat SpA Chief Executive Sergio Marchionne detailed plans intended to revive the U.S. automaker and revamp nearly every element of its operations.
Kicking off a day-long presentation of Fiat's five-year strategy for Chrysler, he said analysts underestimated the financial resilience of the U.S. automaker after deep cost cutting by its former owner, Cerberus Capital Management.
"Most of you underestimated the substantial reduction in fixed costs that was carried out by the old Chrysler," Marchionne said. "The new Chrysler is being incredibly parsimonious."
Chrysler needs cars and trucks that consumers want, Mike Jackson, CEO of AutoNation Inc, the largest U.S. auto dealership group, said on Wednesday at the Reuters Auto Summit in Detroit.
KEEPING OPEL
However, at least one major shakeup will not go ahead.
After months of negotiations, General Motors Co abandoned the sale of Opel to a group led by Canada's Magna on Tuesday, saying improving business conditions and the strategic importance of Opel had prompted the decision by its board.
GM Europe said the plan for Opel included a 30 percent cut in fixed costs but declined comment on possible job cuts and plant closures.
German union and government officials reacted with anger and frustration after agreeing to jobs concessions and billions of euros in assistance to support the sale plan.
"General Motors' behavior toward Germany is completely unacceptable," said German Economy Minister Rainer Bruederle.
GM's behavior showed the "ugly face of turbocapitalism," said Juergen Ruettgers, the premier of North Rhine Westphalia where Opel's Bochum plant lies. Opel labor leader Klaus Franz said the unions would not give in to GM's "blackmail" to help finance its plans and scrapped a deal made on cost savings.
German Chancellor Angela Merkel agreed with Franz on Wednesday that GM must present a plan for Opel that focuses on job security, while Russian Prime Minister Vladimir Putin said the German trust appointed to oversee Opel, and not GM's board, should decide any further steps.
By Jo Winterbottom and Michael Shields
DETROIT/FRANKFURT - The mood in the global automotive industry has shifted to cautious optimism, marked by the unveiling on Wednesday of Chrysler's turnaround plan and General Motors' plan to keep its Opel unit.
However, automakers were in no mood to celebrate a potential recovery and continued to slash costs, with Toyota Motor Corp announcing on Wednesday it was quitting Formula One motor racing and Daimler AG moving to cut 1,000 jobs at its Mercedes-Benz division.
A year of turmoil has reshaped the auto industry and those relying on it.
Optimism abounded in the Detroit suburb where Chrysler is based, however, as Fiat SpA Chief Executive Sergio Marchionne detailed plans intended to revive the U.S. automaker and revamp nearly every element of its operations.
Kicking off a day-long presentation of Fiat's five-year strategy for Chrysler, he said analysts underestimated the financial resilience of the U.S. automaker after deep cost cutting by its former owner, Cerberus Capital Management.
"Most of you underestimated the substantial reduction in fixed costs that was carried out by the old Chrysler," Marchionne said. "The new Chrysler is being incredibly parsimonious."
Chrysler needs cars and trucks that consumers want, Mike Jackson, CEO of AutoNation Inc, the largest U.S. auto dealership group, said on Wednesday at the Reuters Auto Summit in Detroit.
KEEPING OPEL
However, at least one major shakeup will not go ahead.
After months of negotiations, General Motors Co abandoned the sale of Opel to a group led by Canada's Magna on Tuesday, saying improving business conditions and the strategic importance of Opel had prompted the decision by its board.
GM Europe said the plan for Opel included a 30 percent cut in fixed costs but declined comment on possible job cuts and plant closures.
German union and government officials reacted with anger and frustration after agreeing to jobs concessions and billions of euros in assistance to support the sale plan.
"General Motors' behavior toward Germany is completely unacceptable," said German Economy Minister Rainer Bruederle.
GM's behavior showed the "ugly face of turbocapitalism," said Juergen Ruettgers, the premier of North Rhine Westphalia where Opel's Bochum plant lies. Opel labor leader Klaus Franz said the unions would not give in to GM's "blackmail" to help finance its plans and scrapped a deal made on cost savings.
German Chancellor Angela Merkel agreed with Franz on Wednesday that GM must present a plan for Opel that focuses on job security, while Russian Prime Minister Vladimir Putin said the German trust appointed to oversee Opel, and not GM's board, should decide any further steps.