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News > Companies
Daimler may take charge
February 5, 2001: 7:31 a.m. ET

Report: Carmaker to take up to $3B to pay for Chrysler restructuring
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NEW YORK (CNNfn) - DaimlerChrysler plans to take a charge of $2 billion to $3 billion this year to pay for the Chrysler unit restructuring, the Wall Street Journal reported Monday.

The automaker said last week it was cutting 20 percent, or 26,000 jobs, from its work force at the sputtering Chrysler arm over three years.

graphicWhile speculation about DaimlerChrysler (DCX: Research, Estimates) being a takeover target or breaking up is unlikely in the near future, more bad news is expected out of the company before matters improve, the Journal cited people familiar with the situation.

The paper said Chrysler is not the only DaimlerChrysler unit that is bleeding red ink. It added that the carmaker's money-losing Smart unit, which builds small cars targeted at urban dwellers in Europe, is also expected to post an operating loss of $300 million to $400 million for 2001.

The company told analysts last month that it expects to report 2000 net income above 1999 earnings of graphic5.8 billion ($5.4 billion), but losses at the Chrysler unit in the second half of the year will depress the unit's 2000 operating profit to graphic500 million, down 90 percent from graphic5.2 billion in 1999.

DaimlerChrysler is scheduled to report its 2000 financial results on Feb. 26.

U.S. shares of DaimlerChrysler finished Friday's trading down $1.46 at $45.99. The stock has been trading between $68.75 and $37.90 in the past year.  graphic




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