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Daimler stirs the pot again
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October 29, 1999: 6:39 p.m. ET
Reorganizes auto units in move it claims gives more autonomy to U.S. operations
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NEW YORK (CNNfn) - DaimlerChrysler announced another sweeping reorganization of its core auto business Friday, a move that the company portrayed as giving more autonomy to its different operations in Europe and the United States.
"After a year of working together, DaimlerChrysler has concluded that its automotive businesses can best function as individual divisions," said a statement from Jim Holden, president of the German-U.S. automaker.
But the U.S.-German company isn't looking to move away from the vision of an integrated company. Various councils within the corporation announced last month will continue to push for integration and cross fertilization of technologies, knowledge and innovations, said Holden.
The move was regarded as an answer to U.S. executives who were nervous by the September reorganization which led to the departure of Thomas Stallkamp as head of its North American operations. That move also worried many U.S. institutional investors, who had been impressed with Stallkamp's record.
U.S. sales boosted the latest set of third-quarter earnings released Wednesday, suggesting the need for even greater autonomy for U.S. operations, according to some analysts.
"When you look at the recent sales, Chrysler has won with flying colors," said consultant Peter Schmidt at Automotive Industry Data.
While the announcement Friday suggests there will be slightly more autonomy for Chrysler staff such as designers, the reality of the moves remains to be seen, said David Cole, director of Office for the Study of Automotive Transportation at University of Michigan.
"The importance of this is to shore up the autonomy of Chrysler," he said. "The paper stuff is just not the whole story. At a typical organization there's the organization on the chart, and the way it actually functions. They may not overlap."
In trading in U.S. markets Friday, the American depositary receipts of DaimlerChrysler (DCX) were up 1/4 to 77-3/4.
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DaimlerChrysler
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