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DaimlerChrysler may shed 5,000 jobs at Mercedes

At least 5,000 jobs are set to be cut at DaimlerChrysler AG's Mercedes Car Group as the new chief executive seeks to turn the struggling group.

Dieter Zetsche, who takes over as DaimlerChrysler CEO on Jan. 1 and has already assumed responsibility for the Mercedes division, was scheduled to meet with the company's supervisory board yesterday in Detroit.

Though he has not said what he plans to talk about, officials with DaimlerChrysler, its labosr groups and analysts have warned Zetsche may focus on trimming thousands of jobs at the struggling Mercedes Car Group.

A person familiar with the situation, who spoke on condition of anonymity, said that as many as 5,000 jobs could be affected at Mercedes, the unit that Zetsche headed before the 1998 merger with Chrysler Corp.

A second person familiar with Zetsche's plan, who could not be named because it could threaten his employment, said at least 5,000 cuts would be implemented across the Mercedes group, but not in any other part of DaimlerChrysler.

The division was once the pride of DaimlerChrysler, and industry watchers are keen to see if he can invigorate Mercedes the way he did Chrysler, which posted its eighth straight quarterly operating profit in July.

Mercedes has struggled this year, facing a 1.3-million car recall amid quality problems and owner dissatisfaction. The company had already said it was looking at some 1.2 billion euro (US$1.4 billion) in restructuring costs this year.
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