DaimlerChrysler to cut 6,000 administrative jobs to make co. leaner and simpler to run

DAVID McHUGH
Associated Press Writer
The headquarters of the DaimlerChrysler AG in Stuttgart, southwestern Germany, in this Oct. 28, 2005 file photo. Automaker DaimlerChrysler said Tuesday, Jan 24, 2006, that it would reduce administrative staff by 20 percent over three years, cutting 6,000 jobs and saving some 1 billion (US$1.2 billion) a year. (AP Photo/Thomas Kienzle)
BERLIN — DaimlerChrysler AG will cut 6,000 administrative jobs, or one-fifth of its worldwide total, to save more than a billion dollars a year and make the big automaker leaner and simpler to run, the company said Tuesday.

CEO Dieter Zetsche said the streamlining, most of which would occur in Germany, would help boost growth and profits, and focus the company more closely on core production activities. He said it would remove management layers and improve cooperation between its divisions, especially Mercedes and Chrysler.

"Our objective in taking these actions is to create a lean agile structure, with streamlined and stable processes that will unleash DaimlerChrysler's full potential," Zetsche said in a statement. "We're going to build on a strong product portfolio."

Administrative staff would be cut 20 percent over three years, saving some $1.2 billion a year, the company said. The cuts would cover areas such as accounting, auditing, personnel and strategic planning. The downsizing would cost the company around $2.4 billion in restructuring costs from 2006 to the end of 2008.

DaimlerChrysler shares gained more than 5 percent to 44.67 euros ($54.68) in Frankfurt trading.

The plan envisions elimination of administrative jobs that duplicate work at the corporate and production level, the company said. Underlining its emphasis on a sharper focus on manufacturing functions, top management will leave the landmark office tower in the Moehringen district of Stuttgart and move to offices at the production facilities in the city's Untertuerkheim district in order to be physically closer to the assembly line.

The company's other headquarters will remain in Auburn Hills, Mich.

The DaimlerChrysler announcement came a day after Ford Motor Co., the

 

I'm glad it's mostly rich Germans...