DaimlerChrysler AG chief executive Dieter Zetsche said yesterday that the German-American automaker's profitability would continue to improve this year, providing a boost of optimism at the company's annual shareholder meeting.
"We've set ourselves challenging but realistic goals that we intend to achieve with the foreseeable future," he said in prepared remarks ahead of his speech to thousands of shareholders.
Zetsche didn't immediately disclose what this year's profit goal would be, but said a detailed outlook for the year would be unveiled on April 27.
He also said that the company's management and supervisory boards would propose that shareholders get a 1.50 euro (US$1.82) dividend per share for last year, the same amount that was paid in 2004.
Looking at job cuts, Zetsche said that some 6,000 administrative positions would be cut worldwide through this year and beyond, with executives in Germany offered early retirement and severance agreements.
He said that all workers who are under collective bargaining agreements would have those contracts honored, a signal that layoffs would not take place but that buyouts would.
"And we also realize that behind the numbers we are talking about are the lives of real people," he said. "We therefore regard it as our duty to make the necessary personnel cuts fairly."
He said that the cuts, part of the company's "New Management Model," would help make the company more competitive and enhance Germany's reputation as a place to do business.
"We are convinced that the New Management Model will help us to become better and faster at transforming DaimlerChrysler's potential into compelling products," Zetsche said.
Separately, the company will keep at least a 15 percent stake in EADS, Zetsche said, assuring shareholders that the major owner of Airbus remained important to the automaker.
"In 2005, EADS substantially exceeded its financial targets for the sixth year in a row. Its order volume has more than doubled -- partially due to the large demand for the Super Airbus A380," Zetsche said at DaimlerChrysler's annual shareholders meeting in the German capital. "We aim to support this growth and to remain a major shareholder with a stake of at least 15 percent."
Earlier this month, the German-American automaker and France's Lagardere SCA said they were scaling back their stakes in Franco-German group European Aeronautic Defense & Space Co by 7.5 percent each.
DaimlerChrysler currently holds 30 percent of EADS, while Lagardere holds 15 percent. The stakes are worth a combined 4.2 billion euros (US$5.15 billion). The French government owns 15 percent of EADS.
EADS, in turn, owns 80 percent of aircraft maker Airbus. British defense and aerospace group BAE Systems PLC holds the remaining 20 percent, but has said it is in talks with EADS to sell all of its stake.
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