DaimlerChrysler AG's acknowledgment yesterday that it may have to find a partner or spin off its ailing Chrysler arm underscores the depth of the crisis facing Detroit's auto makers -- but also could present an opportunity for a rival seeking a greater presence in North America.
The German-American auto titan, which reported a 40% drop in fourth-quarter net income as a result of a ?124 million ($161.7 million) operating loss at its Chrysler arm, outlined a sweeping restructuring plan that includes cutting 13,000 jobs in the U.S. and Canada, closing one auto-assembly plant, additional production cuts and the elimination of some slow-selling models from its product line.
Under the restructuring plan, Chrysler aims to return to profitability by
2008 and have a 2.5% return on sales by 2009.Yet Chief Executive Dieter Zetsche conceded that might not be enough to sustain Chrysler for the long haul. While implementing the restructuring plan, he and his top aides will look for partnerships to help Chrysler expand into fast-growing international markets, he said, without ruling out a sale. "All options are open," Mr. Zetsche said.
DaimlerChrysler shares were up 8.3%, or $5.33, at $69.78 as of 4 p.m. composite trading on the New York Stock Exchange.
People familiar with the matter said a small group of DaimlerChrysler executives have started exploring how the company could separate itself from Chrysler, though any decision on that option probably won't come for some time, in order to give the current restructuring plan a chance to work.