DC Cutting Jobs at Home; Chrysler, Benz to Grow Closer
Some European reporters still refer to the German-American automaker as "Daimler-Chrysler." But in a press conference this morning, CEO Dieter Zetsche told reporters and analysts, "Today, you can eliminate that hyphen."
Zetsche says that with the restructuring announced this morning, his management team is taking steps to integrate DaimlerChrysler even further-committing to a "new management model" with streamlined processes to unleash DaimlerChrysler's potential and profitable growth. Consolidation will occur at all levels, from Zetsche on down, as his title of head of the Mercedes Car Group is officially combined with his CEO duties. Along with similar moves with other roles, DaimlerChrysler's board will officially shrink from twelve to nine members.
To cast the management revamp in stone, Zetsche says the DC Board of Management will move its headquarters in May of 2006 to Untertuerkheim from Moehringen, though some support functions will stay in Moehringen. With the move, the company's official headquarters will be in Untertuerkeim, the spiritual home of Mercedes-Benz and Auburn Hills, home of the Chrysler Group. "We want the board to be where the action is," Zetsche said.
In describing the changes he hopes to make on the notorious infighting corporate culture at Mercedes-Benz, Zetsche was blunt. By moving the board into the factory, Zetsche says the new company is all automotive. "We all drive the cars at night and see what kind of progress we are making," he said. "This is the kind of culture we want to have - no bullshit, no politics."
Much of the reductions will involve head count at Mercedes as well as realignments in its truck and bus divisions, which will be split into a truck group, while vans will be put under the Mercedes Car Group aegis. DC hopes to effect a net savings of $1 billion annually from the combination of cuts and merging the back offices of the car and truck groups. However, the cuts will be painful at home, where DaimlerChrysler says it will eliminate 6000 jobs, reducing its management ranks by 30 percent. The personnel cuts will take three years and two billion Euros to complete.
The cuts will mean one thing for Chrysler Group:
bringing it "markedly closer" to its German sister company. For example,
research for all DC car divisions will be merged into Mercedes Car Group.
Zetsche hinted that the lessons of companies like
Zetsche Era Begins at DC by Joseph Szczesny
Cordes, Schrempp, even Hubbert are history as
Zetsche Determined to Finish Merger
Chrysler Group CEO Dieter Zetsche
His plan to revamp the company's management team calls for concentrating all of the company's far-flung research and development activities under the Mercedes-Benz Car Group. Thus, the Chrysler Group's vestigial advanced research and development unit will now be absorbed in the new Mercedes unit. More significantly, perhaps, the extensive research capability that DaimlerChrysler has maintained outside the car groups also will be absorbed into Mercedes-Benz.
Zetsche said cooperation between the Mercedes Car Group and the Chrysler Group will become markedly closer. However, he stressed that he isn't about to sacrifice Mercedes' hard-won reputation as one of the world's top luxury brands in an effort to reduce costs. "A clear priority within this effort will continue to further strengthen brand identity," he said.
The DaimlerChrysler CEO also said the old idea of platform-sharing is already fading in the industry. The new model is more like Legos, where certain modules or building blocks can be shared, he said. If the block doesn't change the perception of the vehicle, it might be found on both Chrysler and Mercedes vehicles. But if the module means something to the customer then it will be differentiated, Zetsche said. "We want to turn scale into profitability," he said. "You can expect to see more examples of collaboration, especially when we can transfer knowledge between the groups, such as when the Chrysler Group tapped the rear-wheel-drive expertise of Mercedes-Benz in the development of the Chrysler 300C," he said.
Zetsche also stressed the flexible development system should allow DaimlerChrysler to produce more unique vehicles.
In addition, instead of just having departments devoted to certain kinds of research, DaimlerChrysler plans to use "project houses," Zetsche suggested.
"You will also see more examples of clearly defined 'project houses' where engineers from different divisions work together for the benefit of the whole company," he said.
The joint venture in
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The real challenge begins after the cuts are made, analysts say.
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The Way Forward turnaround plan
Ford presented on Monday outlined a dramatic transformation at the number two
automaker, including 14 plant closings and the elimination of perhaps 30,000
jobs. Yet the announcement was surprisingly short on some details. Only three of
seven assembly plants were named. TheCarConnection.com has learned Ford
officials will soon reveal plans to also close one of their Mexican assembly
lines, and another in
NASCAR Sets "Car of Tomorrow" Launch for 2007
While the news that
For five years, NASCAR has been working on the development of a new specification of chassis that it calls the "Car of Tomorrow." NASCAR announced on Monday that the CoT will be phased into competition over a three-year period starting in 2007, and the new car will obsolete the millions of dollars' worth of rolling stock that currently occupy racing team garages. It is, simply, the biggest change in NASCAR's hardware in 40 years, since the move from unibody stock cars to tube-frame chassis.
Without overwhelming you with a plethora of details, suffice it to say that the CoT is bigger, boxier and safer. The driver will sit three inches further back and four inches further toward the center of the car, reducing the possibility of injury from side impacts. The car is four inches wider and two inches taller than the current car, and more "crushability" is built into the sides of the car, offering further protection.
The car is designed to be less aerodynamic than the current model, with a more-upright windshield that increases drag and a larger and boxier front bumper that catches rather than deflects air.
NASCAR says that, after the
initial expense of building new cars, teams will save money in the long run
because the CoT is designed to be flexible in its application on the different
types of tracks. Currently the top teams require about 17 different cars to run
a season, with unique chassis for superspeedways, intermediate, short, and
road-course tracks, and further specialization in some cases for particular
tracks (i.e., a "
Another benefit of the CoT, according to NASCAR, will be closer competition. Current-day cars suffer from "aero push" on the longer ovals due to their slick aerodynamics, making passing difficult. The CoT is designed to minimize "aero push," and will hopefully bring back the door-to-door racing and slingshot passing maneuver that were so popular in the 1970s.
The plan is for the CoT to be
required in 16 events during 2007, at Bristol, Phoenix, Martinsville, Richmond,
Dover, New Hampshire, Darlington, the fall race at Talladega (the last
restrictor-plate race of the season) and road-course races at Infineon Raceway
and Watkins Glen. In 2008 26 events will be added, including both races at
If you follow the sport at all, you know that NASCAR machinery has moved closer and closer to a "spec" car over recent years and that they have almost nothing in common with their street-car counterparts other than headlight and taillight decals and grille treatment. All NASCAR cars have carburetors and rear-wheel drive while their street-car counterparts are fuel-injected with front-wheel drive, and all NASCAR cars resemble two-door coupes, while the Ford Fusion and Dodge Charger are available only as four-door sedans. The switch to the CoT will do nothing to change this, and the manufacturers will have to be content with the same small amount of branding identification, or perhaps a little less, as they have today for their estimated $75-million annual contribution to the sport. Whether that is enough to keep their interest (and funding) remains to be seen.
The bottom line is that it will probably make little difference to the millions of fans who pack the grandstands and tune in on television. Oh sure, there will be grumbling from the old-timers and "purists," just as there always has been when changes have been introduced, and the teams will no doubt be unhappy with garages full of obsolete cars and having to build all-new rolling stock, but if in fact the cars are safer, racing is closer and long-term expense is less, this will all be just another milestone in the history of the sport. -John F. Gardner
With tons of dirt and a dose of
speed, the corner of
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