TURIN -- Sergio Marchionne will step down as Fiat Auto CEO during 2007, but will keep his post of Fiat Group CEO even beyond 2010.

"I think I will step down as (Fiat Auto) CEO some time in 2007," Marchionne told analysts in Turin today. "I think there is enough talent in the group so I won't hire anyone from outside the company."

Marchionne refused to identify potential candidates, adamantly admitting, "I have not thought about it yet."

The most credited forerunners for becoming Fiat Auto CEO are Luca De Meo, 39, head of the Fiat brand, and Alfredo Altavilla, 44, head of Fiat Auto business development and Fiat Powertrain Technologies CEO.

Marchionne was appointed Fiat Group CEO in June 2004.

In February 2005 he fired Fiat Auto CEO Herbert Demel and personally took charge of the money losing auto division.

At that time, Marchionne explained "Losing 820 million euros a year, Fiat Auto was Fiat Group's biggest issue. I think it almost a natural that a group CEO takes direct charge of the biggest single problem his group is facing."

Fiat Auto showed its first trading profit in the fourth quarter of 2005 - after 17 quarters in the red - and this year is planning 275 million euros trading profit compared with a 281 million euros loss in 2005.

Marchionne unveiled today an ambitious growth plan for Fiat Auto, which calls for selling 2.8 million units in 2010 from 2 million this year.

Trading profit will grow from roughly 1.1 percent this year to a range between 4.5 percent and 5.3 percent in 2010, around 1.6 billion euros.

At the group level, Marchionne said his four-year plan will lead in 2010 to roughly 5 billion euros of trading profit and 3.4 billion euros to 3.6 billion euros net profit.

Asked if he will look for other challenges when the Fiat Group relaunch plan is completed in 2010, Marchionne at first made a joke.

"I will become a journalist, so I can ask questions without having to give answers," he said.

Later, Marchionne said he plans to remain at the helm of the Fiat Group which, by that time, "would be a case history of industrial turnaround."

Reports circulated throughEurope again last week that DaimlerChrysler was thinking of spinning off the Chrysler Group -- and the rumors helped push the company's stock towards $60 per share.



The speculation again drew the obligatory denials from DaimlerChrysler spokesmen in both Auburn Hills and Stuttgart where executives tried to keep the spotlight on the introduction of the Mercedes-Benz C-Class.



Dieter Zetsche, DaimlerChrysler's chief executive officer, has repeatedly said there are no plans to spin off the Chrysler Group.



The rumors, however, seemed to be fueled by the side-line conversations at the C-Class launch and an upcoming meeting of the DaimlerChrysler supervisory board, which is scheduled to hear an update of plans for turning around the fortunes of the ailing Chrysler Group.



In addition, the rumors also reflect the sentiment of a vocal group of German shareholders, including some institutional shareholders, who have been vocal opponents of the 1998 merger that created the German-American automaker. Roughly 80 percent of DaimlerChrysler's outstanding common stock is owned by German citizens and institutions. Dissident German shareholders, in fact, were instrumental in forcing Juergen Schrempp, then DaimlerChrysler chairman, to back out of a deal with Mitsubishi three years ago.

Meanwhile, the Chrysler Group lost $1.5 billion through the first three quarters of 2006, and losses appear to have continued during the fourth quarter as the company cut production to curb an unwanted increase in inventories.

Tom LaSorda, Chrysler Group president, has said he will make the turnaround plan public by the end of February. The bulging inventories and red ink have put a lot of pressure on LaSorda, who was forced to dismiss his top marketing executive last fall after a revolt by franchised dealers.

LaSorda, a manufacturing whiz, is now heading up the company's marketing effort personally and trying to repair relations with dealers while working under a steady stream of stories, indicating he is about to be replaced by Volkswagen's Wolfgang Bernhard, who will be unemployed at the end of the month.

Zetsche, however, went out of his way to embrace LaSorda during a joint appearance at the North American International Auto Show and dismissed suggestions Bernhard was coming back to DaimlerChrysler.

LaSorda also is walking something of a tight rope. On the one hand, he is trying to convince skeptics in the press and investment community that Chrysler's problems last summer were only a temporary aberration. At the same time, he also has to convince the United Auto Workers the situation is dire enough to require contract concessions similar to those the union gave General Motors and Ford in 2005.

So far, however, the UAW has balked and the dispute over concessions is simmering in the background. The union agreed to take another look at DaimlerChrysler's financial reports but so far the effort has not changed the UAW's overall position.

On Friday, DaimlerChrysler shares surged 1.7 percent on the rumors of the spinoff and a positive introduction of the new C-Class sedan. The company expects the new car to help boost profits, Zetsche said.

February 05, 2007
Reuters News Agency

DETROIT – DaimlerChrysler AG's Chrysler Group plans to cut more than 10,000 factory jobs and close at least two plants to return the U.S-based unit to profitability, the Detroit News reported Monday.

A secret restructuring plan dubbed "Project X" is focused on transforming Chrysler into a smaller, more efficient automaker with closer ties to its German parent company and the Mercedes-Benz luxury division, the newspaper said, citing sources.

Chrysler spokesman Jason Vines called the report "speculation" and declined further comment.

A restructuring plan for Chrysler is scheduled to be announced on Feb. 14 in conjunction with fourth-quarter results for its parent company.

The plan would include some "changes" to manufacturing operations, Chrysler Group Chief Executive Tom LaSorda told reporters in Las Vegas on Saturday.

The newspaper said an assembly plant in Newark, Delaware, and an engine plant in Detroit would likely be closed.

"We need to go deeper and faster, or else what's the point?" DaimlerChrysler AG Chairman Dieter Zetsche is said to have told Chrysler officials recently, the newspaper said.

Teams from Mercedes and the consulting firm McKinsey & Co. have become fixtures at Chrysler headquarters in Auburn Hills, Michigan, according to the paper.

Chrysler was dogged by inventory management problems in 2006, including its disclosure that it had been holding large numbers of vehicles in a "sales bank" before they had been ordered for showrooms.

At one point last year, the No. 4 U.S. automaker had about 100,000 vehicles sitting in the sales bank of unassigned inventory that were not being disclosed in its monthly sales calls for analysts.

The Chrysler group said today that it will cut 13,000 jobs; close its Newark, Del., assembly plant, cut 400,000 units of annual production capacity and spend $3 billion on new powertrains.

The 13,000 job cuts will occur through 2009. Of that total, 11,000 jobs will be hourly workers, with 9,000 jobs cut in the United States and 2,000 in Canada. The Chrysler group also plans to cut 2,000 salaried jobs -- 1,000 each this year and in 2008.

In addition to closing the Delaware plant in 2009 that builds the Dodge Durango and Chrysler Aspen SUVs, the automaker also will cut a shift at the Warren, Mich., plant this year that builds pickups. Next year, it will cut a shift at the St. Louis South assembly plant that builds minivans. It also will close a parts distribution center in Cleveland in December.

Hargrove calls cuts 'absolute disaster'

In the wake of the announcement, Canadian Auto Workers union president Buzz Hargrove called the job cuts an "absolute disaster."

"This is a huge hit to us," he said during a news conference in Toronto.

Hargrove said the changing dynamics of the auto market has seen Canada go from the fourth-largest producer of automobiles in the world to eighth place in 2005. He said the country will likely be pushed to tenth by the end of this year as China and India increase their auto production.

CAW: Chrysler cuts ‘disaster’
TheStar.com - Business - CAW: Chrysler cuts ‘disaster’
2,000 of 13,000 Chrysler job cuts are in Canada and Buzz Hargrove expresses devastation

February 14, 2007
Associated Press and Canadian Press
The president of the Canadian Auto Workers said today that the loss of 2,000 DaimlerChrysler jobs in Canada is “an absolute disaster” for the industry.
Buzz Hargrove bristled at the idea that the cuts could have been worse and said at a press conference that they spell disaster for the Canadian auto industry.

DaimlerChrysler’s restructuring announcement today will see about 13,000 jobs in total eliminated under a plan to reduce the struggling automaker’s costs and return it to profitability.

Two thousand of those jobs are in Canada.

Hargrove said at a press conference that the cuts represent just one more hit from the continued downsizing of DaimlerChrysler.

Hargrove also expressed frustration that he can’t get a meeting with Prime Minister Stephen Harper to discuss the industry’s problems, including what he calls unfair trade practices on the part of offshore auto manufacturers.

The 13,000 jobs will be eliminated over the next three years in a wrenching restructuring that eventually may lead to a DaimlerChrysler divorce.

The Chrysler unit of the German-American automaker (NYSE: DCX) announced its long-awaited plan at its Auburn Hills headquarters, saying it would cut 16 per cent of the U.S. division’s work force, a move it hoped would return its U.S. operations to profitability by next year.

The plan was announced only hours after Chrysler’s parent, DaimlerChrysler AG, said it was considering “far-reaching strategic options with partners” and that “no option is being excluded” as it reported a 40 per cent drop in companywide profit for the fourth quarter.

The plan calls for closing the company’s Newark, Del., assembly plant, and reducing shifts at plants in Warren, Mich., and St. Louis. A parts distribution center near Cleveland also will be closed.

Under the plan, 11,000 production workers — 9,000 in the U.S. and 2,000 in Canada — will lose their jobs over the next three years, and 2,000 salaried jobs also will be cut — 1,000 this year and 1,000 in 2008.

The job losses are the latest in a yearlong series of devastating cuts in the ailing domestic auto industry, which likely will lose more than 100,000 jobs in all.

“We believe that this represents a solid plan to return to profitability and lay the groundwork for a solid future,” Chrysler CEO Tom LaSorda said at a news conference.

DaimlerChrysler chairman Dieter Zetsche said the company was looking into “further strategic options with partners” for Chrysler.

“In this regard we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler,” Zetsche said in a statement.

Analyst Georg Stuerzer with UniCredit, when asked if the wording in the statement was a sign that the company was mulling a spinoff of Chrysler, said, “the impression was right. This is what people are thinking it could mean.”

He added that the restructuring could be the first step, likely followed by a push by DaimlerChrysler to find a partner with which to operate the Chrysler unit, or even find a suitable buyer for it.

Bank of America auto analyst Ron Tadross said in a note to investors that DaimlerChrysler “did not rule out disposing of its money-losing Chrysler division.”

Tadross said he “would not be surprised if there is good interest in Chrysler. We see Chrysler as a decent business, at least relative to the other U.S. domestic manufacturers.”

DaimlerChrysler said Wednesday that its fourth-quarter earnings plunged on weaker demand at the Chrysler unit, where sales fell seven per cent. DaimlerChrysler’s profit fell to $761 million (all figures U.S.), or 74 cents per share, as revenue slipped to $53.7 billion.

The job cuts at Chrysler will reduce by 400,000 the number of vehicles that operations can produce each year.

The Delaware plant, which makes the slow-selling Dodge Durango and Chrysler Aspen mid-sized sport utility vehicles, employs about 2,100 workers. Chrysler plans to close it in 2009, with a shift reduction this year.

Dean Almuwalld, who works in painting on the Newark plant’s assembly line and has worked at the plant for 13 years, learned its future from news reports.

“I’ll take a transfer,” the 33-year-old said as he walked into the local United Auto Workers hall. Almuwalld said he has relatives in Detroit. “I’ve got family there, so I’m ready to go.”

The Warren truck plant, with 3,313 hourly employees, makes the Dodge Ram and Dakota pickups, which saw sales decline last year. Chrysler plans to eliminate a shift there this year.

The other plant to lose a shift is the St. Louis South assembly plant, which makes Chrysler and Dodge minivans. It has 2,850 workers and would lose the shift in 2008.

The Cleveland-area parts distribution center would be close sometime this year, Chrysler said.

It’s becoming an alarmingly familiar event — a large U.S. automaker announces plant closures and thousands of layoffs as it struggles to cut factory capacity to match falling demand for its vehicles.

http://www.msnbc.msn.com/id/17147144/

NEW YORK (CNNMoney.com) -- General Motors is in talks to buy DaimlerChrysler AG's struggling Chrysler Group in its entirety, according to several reports.

According to the reports, sources in Germany and the United States said high-level talks between GM and DaimlerChrysler executives are taking place.
Chrysler, which has already announced plans to close plants like this one in Newark, Del., and cut 13,000 jobs, could be sold to rival General Motors, according to published reports.

CNN's Ali Velshi has details of Daimler Chrysler's restructuring plan. (February 14)
Play video

Its German parent confirmed Wednesday it is looking at strategic options for the North American unit. When asked if those options included a sale or spin-off of the unit, DaimlerChrysler Chairman Dieter Zetsche responded "this means all options are on the table."

Chrysler Group announced Wednesday it would be cutting about 13,000 workers and closing plants over the next three years as a part of a restructuring plan aimed to restore profits by next year.

Talks of an alliance between GM and DaimlerChrysler was first reported recently in Germany's Manager-Magazin.
10 cars worth waiting for

Other unnamed sources said to be familiar with the discussions confirmed the reports Friday for Reuters and the industry newspaper Automotive News.

DaimlerChrysler employed J.P. Morgan Chase & Co. to consider options for the Chrysler Group, to help the automaker explore strategic options, according to trade newspaper.
For sale: A smaller Chrysler

But others are also skeptical on whether the discussions are real.

"This would be an at least $5 billion plus deal and GM is not that liquid right now," John Casesa said, an automotive analyst with Casesa Strategic Advisors, told CNN. "I'm not convinced at all and I think it's unlikely."

Other experts contacted by CNNMoney.com said that while a GM purchase of Chrysler appeared unlikely, they could see other buyers emerging.

"The challenge is who would be a buyer," David Cole, chairman of the Center for Automotive Research, said Wednesday of a possible sale of Chrysler. "Maybe a Chinese company that really wants entrance into U.S. market or Renault-Nissan would see it fit with its strategy. But it's tough."
Chrysler's Valentine's Day massacre

Carlos Ghosen, the CEO of both French automaker Renault and Japanese automaker Nissan (Charts), had expressed interest in finding a North American partner to join the alliance between his two companies. Talks between GM and those two automakers last year were abandoned without any agreement.

Kevin Tynan, auto analyst at Argus Research, said Wednesday he believes Chrysler will end up being sold due to pressure from DaimlerChrysler's shareholders to undo the 1998 merger, but he thinks a sale to a private equity group is more likely than a combination with another automaker.

"There's value to those brands," he said. "I think relative to Ford Motor (Charts), there's less dead weight. Nine years later, it's probably the right thing to do. I think there's a feeling in Germany that it's time to cut bait."

Officials for DaimlerChrysler and GM issued no comments on the reports.

DaimlerChrysler has long tried to reverse the drop in sales with previous cost-cutting moves but slipped into the No. 4 spot last year behind Toyota (up $0.21 to $136.98, Charts) in the United States.

Other reports have suggested that talks between Chrysler and GM were more limited in scope than a full merger. The Wall Street Journal reported Thursday that the two were in talks to jointly develop a large SUV that would be similar to the Chevrolet Suburban, a product that Chrysler Group doesn't have in its lineup. The New York Times had a similar report Friday. Neither publication had their own reports on the potential merger talks as of mid-day Friday.