DaimlerChrysler Creates New Management Model
24 Janvier 2006 - 12:33PM
PR Newswire (US)
- Integration leads to organization that is faster, more flexible,
leaner and more efficient STUTTGART, Germany, Jan. 24
/PRNewswire-FirstCall/ -- DaimlerChrysler today introduced a new
management model designed to enhance competitiveness and promote
further profitable growth. The new model will further integrate the
company's functions, focus the operations within DaimlerChrysler on
core processes, and encourage internal collaboration. Moreover, it
will reduce redundancies and remove management layers. (Logo:
http://www.newscom.com/cgi-bin/prnh/20020212/DCXLOGO ) "Our
objective in taking these actions is to create a lean, agile
structure, with streamlined and stable processes that will unleash
DaimlerChrysler's full potential," said Dieter Zetsche, Chairman of
the Board of Management (BoM) of DaimlerChrysler AG. "We're going
to build on a strong product portfolio." In 2005 alone,
DaimlerChrysler launched 17 new products, giving it one of the
youngest product lines in the automotive industry. The company
plans to continue its aggressive level of investment. "Over the
last several years, we focused on our automotive business and
started to streamline the core processes in our divisions," said
Zetsche. "But to safeguard our future in this competitive global
industry, we need to apply that same equation across all general
and administrative (G&A) functions ... with the added dimension
of adapting to the needs of our business." The preliminary work for
this new model began in mid-2005 with a high- level internal team.
The program focuses on the company organization and the processes
that are used throughout the DaimlerChrysler enterprise. Among
structural changes is a consolidation and integration of G&A
functions, such as Finance and Controlling, Human Resources and
Strategy. These areas will be centralized to report to the
respective head of that function throughout the entire company.
Redundancies between staff functions at the corporate and operating
levels will be eliminated, thereby reducing the complexity of the
organization. A more integrated G&A organization will result in
more consistent processes, and reporting and decision-making will
become shorter, faster and more efficient. "We want our divisions
to concentrate on the automotive core processes - development,
production and sales," added Zetsche. The consolidation of
corporate functions will occur throughout the company. The earlier
decision for Dieter Zetsche to serve a dual role as Chairman of the
Board of Management and concurrently as Head of the Mercedes Car
Group, will now be reflected in the organizational structure as
well. BoM members Bodo Uebber and Rudiger Grube will also continue
to have dual roles: Uebber for Finance and Controlling, as well as
DaimlerChrysler Financial Services; Grube for Corporate Development
(including Information Technology) and DaimlerChrysler's
participation in EADS (European Aeronautic Defense and Space
company). That will effectively reduce the number of BoM members to
nine (from 12 about one year ago). The address on the corporate
letterhead will also change. The German BoM members currently based
in Stuttgart-Moehringen will relocate in May 2006, along with their
staffs, to Stuttgart-Untertuerkheim, and therefore closer to
production. This means the DaimlerChrysler headquarters function
will be located in Stuttgart-Untertuerkheim and Auburn Hills,
Michigan. Several support functions and non-G&A functions will
stay in Stuttgart-Moehringen. On the basis of the new structure,
the company will standardize the most important processes within
and across divisions, according to best-practice criteria.
Cooperation between the Mercedes Car Group and the Chrysler Group
will become markedly closer, according to Zetsche, but "a clear
priority within this effort will continue to further strengthen
brand identity. You can expect to see more examples of
collaboration especially when we can transfer knowledge between the
groups, much as Chrysler Group tapped the rear-wheel- drive
expertise of Mercedes-Benz in the development of the Chrysler
300C." "Beyond that," added Zetsche, "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." A current example is the joint project to develop
hybrids, where Mercedes-Benz and Chrysler engineers are working
side-by-side (with General Motors and BMW specialists). This joint
team is creating a new two-mode hybrid system that will power
future vehicles from the brands of both divisions. A second example
is the collaboration on the world's cleanest diesel technology
called BlueTec, between Commercial Vehicles, Mercedes Car Group,
and Chrysler Group. Several other organizational changes will also
be made. Corporate-wide Research and Technology will be merged with
product development of Mercedes Car Group under BoM member Thomas
Weber. The new organization -- Group Research & MCG Development
-- will continue as the research center of competence for the
entire company. Within this realignment, the new function will take
on more responsibility for advanced engineering activities of all
automotive divisions. This action is expected to reduce the
time-to-market of future technologies, keep research focused on
customer-relevant innovations, and eliminate redundancies. The
Commercial Vehicles Division, headed by BoM member Andreas
Renschler, will also undergo changes. It will focus on commercial
trucks as its core business and operate under the name Truck Group,
while the Bus and Van business will be reported elsewhere. The
following operations will continue in Truck Group: Trucks
Europe/Latin America (Mercedes-Benz), Trucks NAFTA (Freightliner,
Sterling, Thomas Built Buses), Mitsubishi Fuso Bus and Truck
Corporation, and Truck Product Creation. The new structure will
create further synergies between the regional truck units and
brands, and allow the Truck Group to accelerate its profit
potential initiative called Global Excellence. Meanwhile, the
financial and operating results of Bus and Van operations will be
reported in a new segment called Van, Bus, Others. The direct
management of the Bus and Van businesses will permit a stronger
orientation toward the unique needs of customers and markets in
these product segments. Due to the commonality of powertrain and
components, the Bus business will report to the head of the Truck
Group; the Van business to the head of the Mercedes Car Group. In
total, the new management model will reduce the cost of
administrative functions at DaimlerChrysler, in an effort to reach
benchmark levels. Together with other ongoing efficiency programs
(such as MCG's CORE program), G&A costs are expected to be
reduced by 1.5 billion Euro ($1.78 billion*) per year. The net
effect of today's announcement will be 1 billion Euro ($1.18
billion) per year. Preparation to implement this comprehensive
program will start immediately, and take three years to fully
implement. It is expected to require an overall expenditure of
about 2 billion Euros ($2.37 billion) from 2006 to the end of 2008.
Due to the elimination of redundancies, consolidation of staffs and
optimization of processes, headcount will be reduced by about 6000
employees over the three-year span. This represents roughly 20
percent of general and administrative staff (30 percent at
management levels). These reductions will take place in G&A
functions around the world. At a meeting today, the DaimlerChrysler
Supervisory Board agreed to the realignment of functions in the
Board of Management, which will be implemented by March 1st, 2006.
The specific measures required to put the new actions into place
are expected to be presented to the Supervisory Board for approval
by the end of April. This document contains forward-looking
statements that reflect management's current views with respect to
future events. The words "anticipate," "assume," "believe,"
"estimate," "expect," "intend," "may," "plan," "project" and
"should" and similar expressions identify forward- looking
statements. Such statements are subject to risks and uncertainties,
including, but not limited to: an economic downturn in Europe or
North America; changes in currency exchange rates, interest rates
and in raw material prices; introduction of competing products;
increased sales incentives; the successful implementation of the
CORE program by the Mercedes Car Group and the new business model
for smart; supply interruptions of production materials, resulting
from shortages, labor strikes or supplier insolvencies; the
resolution of pending governmental investigations; and decline in
resale prices of used vehicles. If any of these or other risks and
uncertainties occur (some of which are described under the heading
"Risk Report" in DaimlerChrysler's most recent Annual Report and
under the heading "Risk Factors" in DaimlerChrysler's most recent
Annual Report on Form 20-F filed with the Securities and Exchange
Commission), or if the assumptions underlying any of these
statements prove incorrect, then actual results may be materially
different from those expressed or implied by such statements. We do
not intend or assume any obligation to update any forward-looking
statement, which speaks only as of the date on which it is made.
*Conversions using Noon buying rate of 12/31/05. Further
information from DaimlerChrysler is available on the internet at:
http://www.media.daimlerchrysler.com/ FCMN Contact:
julia.engelhardt@daimlerchrysler.com
http://www.newscom.com/cgi-bin/prnh/20020212/DCXLOGODATASOURCE:
DaimlerChrysler CONTACT: Han Tjan, +1-212-909-9063, or Thomas
Froehlich, +49 (0) 711-17-93311 Web site:
http://www.daimlerchrysler.com/
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