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from a report in the Detroit News

Eight years after the DaimlerChrysler merger, Mercedes is back riding high and investors are once again questioning whether Chrysler should remain a part of the global automaker.
Last month, DaimlerChrysler AG said Auburn Hills-based Chrysler would lose $1.5 billion in the third quarter, more than twice the loss it had forecast less than two months earlier. Chrysler now expects to lose $1.2 billion this year.

For investors, the swift and unexpected deterioration of Chrysler's performance recalled its stunning profit warning in the second quarter of 2003.

Adding to their concerns, the top management in Stuttgart, Germany, appeared to be just as surprised by the troubles at Chrysler as they were. "This raises serious questions," DaimlerChrysler CEO Dieter Zetsche told reporters at the Paris car show.

Zetsche, who had been the CEO of Chrysler until last year, said Chrysler continues to aim for a profit margin of 5 percent of sales. "More importantly, we have to derive the formula to make that sustainable," he said.

But investors are losing faith -- and patience.

Chrysler has lost "$4 billion over the past five years against a $32 billion accumulated profit for the group," Deutsche Bank said in a report last week.

"This might be time for DaimlerChrysler to reconsider whether Chrysler should remain part of the group in its current form. We believe seeking a partial or entire spinoff or an industrial alliance with another party could be a route to higher and more predictable earnings."

At an investor conference last week, Zetsche said DaimlerChrysler was not considering selling Chrysler. As the executive who led Chrysler and carried out its last restructuring, Zetsche is as invested in the U.S. automaker's success as was Juergen Schrempp, his predecessor and the mastermind of the 1998 deal.

When DaimlerChrysler revised its loss forecast, Zetsche could barely contain his anger in a conference call with reporters and analysts. He criticized Chrysler's sales forecasts as being overly optimistic. While he said he was not planning management changes at Chrysler, President Tom LaSorda, sales chief Joe Eberhardt and Chief Operating Officer Eric Ridenour are under intense pressure to resolve the problems by the end of the year.

In an interview at the Paris motor show, Eberhardt said the ground shifted under Chrysler this summer. The employee discounts offered to reduce bulging inventories were undercut by the aggressive discounting by its competitors. "Those are events you can't anticipate," he said.

With most of Chrysler's model launches for 2006 coming out toward the end of the year, he expects a sales rebound soon.

"In relative terms, our performance is clearly significantly better than other players in the market," Eberhardt said. But Chrysler still has to reassess its product portfolio and business structure, he said.

For most of this year, as General Motors Corp. and Ford Motor Co. moved to restructure their domestic operations, investors worried that Chrysler would buckle under the intensifying competitive pressures.

Deutsche Bank said Chrysler was hobbled by serious structural handicaps -- its reliance on light trucks, its scant presence in markets outside North America, and high labor costs, including $2 billion in health care costs.

DaimlerChrysler's management was stunned in September when United Auto Workers union President Ron Gettelfinger said he would not extend the company the same cost-saving concessions given to GM and Ford. "I never expected him to come up with that position, and it's not acceptable," Zetsche said.

While Chrysler is sputtering, Mercedes has rebounded after a couple years in disgrace. Zetsche said the brand's recovery is on track. "I'm convinced we'll see the 7 percent return on sales for next year," he said. "Seven percent can't be the end of the story for a luxury brand, and a brand like Mercedes."
 

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All this crap makes me laugh. Thursday at noon they posted mandatory Saturday for Windsor Assembly and Brampton assembly. They say we have a 90 day inventory of mini vans on hand and yet they paid us time and a half to build 1500 more mini vans that are gonna sit in some field for the next two or three months. We also have a week of layoff planned for October and another week for December and we are working overtime? Shades of 1979/81 are showing their ugly faces again. Mismanagement at its finest.
 

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I'm on layoff right now and, watching this o.t. I'm scratching my head.
 

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There is a different stories of doom and gloom to huge gains from week to week according to different tabloids. The whole picture is twisted and mind boggling to say the least.
 
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