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Chrysler aims to cut costs by US$1,000 per vehicle as Q3 loss hits US$1.5 billion


Chrysler plans to reduce costs by US$1,000 per vehicle and is reviewing all its operations after the US unit of DaimlerChrysler AG lost as much as US$1.5 billion in the third quarter.

Tom LaSorda, Chrysler's chief executive officer, is heading teams "looking at every part of its business," Jason Vines, a spokesman for the automaker, said on Thursday.

The effort, dubbed Project Refocus, began in August and includes advice from DaimlerChrysler's Mercedes and commercial-truck units, he said.

Chrysler is retrenching as US consumers buy fewer of the pickup trucks, sports utility vehicles and minivans that dominate its lineup. The Auburn Hills, Michigan-based unit's US sales have fallen 9.1 percent this year, letting Toyota Motor Corp pass DaimlerChrysler as third in the market. DaimlerChrysler is the world's fifth-largest automaker.

"Chrysler still has some room for further consolidations for things such as components in the next round of platforms," said Michael Robinet, an analyst at consulting firm CSM Worldwide Inc.

"But I would be surprised if this wasn't an ongoing effort and they're just publicizing it now," Robinet said.

"This is a brutal market we're in, and we're going to make sure we're in the first tier, period," Vines said.

The review will include manufacturing, purchasing, engineering and sales and will result in change to be announced by LaSorda, he said. The spokesman declined to say when that will occur.

Executives from the other DaimlerChrysler units who are being consulted include Rainer Schmueckle, chief operating officer at Mercedes, Vines said.

Mercedes went through a restructuring that included eliminating 8,500 jobs and has improved sales with new versions of its S-Class sedan and SUVs such as the GL450.

Vines declined to say which other executives from Mercedes and the commercial-truck unit have been consulted.

Chrysler is cutting production as much as 17 percent in this year's second half because of its sales decline. It's also introducing 10 new models this year, with most of them coming this quarter.

DaimlerChrysler, based in Stutt-gart, Germany, estimated Chrysler's third-quarter loss last month and will announce final results next week. The Chrysler review was reported earlier on Thursday by Dow Jones News-wires, which cited the German magazine Manager.

Chrysler's US-based rivals, General Motors Corp and Ford Motor Co, already are trimming costs because of losses.

Ford, after a US$1.44 billion first-half loss, is accelerating 30,000 factory job cuts and slashing 10,000 more salaried positions in North America.

GM, the world's largest automaker, plans to cut US$9 billion in costs by the end of the year and is eliminating more than 30,000 union jobs after losing US$10.6 billion last year.

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