FRANKFURT, Germany (AP) — DaimlerChrysler (DCX) said Wednesday it is reviewing all aspects of its U.S.-based operations, including management and strategy, after a $1.5 billion operating loss at the Chrysler division dragged down the automaker's third-quarter profit 37%.
DaimlerChrysler's overall profit beat analysts' estimates, but the tough talk about examining the Chrysler Group led analysts to question whether the division could even be sold off.

Chrysler executives said they are "in no way satisfied" with the third-quarter results but said it is far too early to draw any conclusions.

DaimlerChrysler earned 541 million euros ($686 million) in the July-September period, down from a profit of 855 million euros a year earlier. Analysts polled by Dow Jones Newswires had expected a loss of 47 million euros ($58.9 million).

Overall, DaimlerChrysler's operating profit fell 51% to 892 million euros ($1.13 billion), but beat analysts' forecast of 549 million euros ($688.5 million).

While results lagged at Chrysler — hampered, like its U.S. rivals, by difficult market conditions — the German-American automaker saw strength in its Mercedes Car Group, where operating profit more than doubled to 991 million euros ($1.3 billion).

Overall sales fell 8% to 35.2 billion euros ($44.6 billion), hurt by a 26% decline at Chrysler to 9.5 billion euros ($12 billion).

The 1.16 billion euro operating loss at Chrysler compared with an operating profit of 310 million euros the year before and "was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing," DaimlerChrysler said in a statement.

Chrysler CEO Tom LaSorda said the company is "in no way satisfied" with the third-quarter results.

"We have taken dramatic steps to reduce production and shipments to address the inventory situation in the U.S. and we continue to work to find new ways to eliminate waste, lower our costs and improve quality," he said in a statement.

Chief Financial Officer Bodo Uebber said seven teams comprised of executives from Chrysler and other parts of DaimlerChrysler would analyze and examine the division's business practices and review "all aspects of the value chain."

The teams will review Chrysler Group's product strategy, portfolio management, capital management, fixed cost management, structural changes, manufacturing, material costs, revenue management and quality. No timetable was released.

"Our aim must be to improve the earnings situation at the Chrysler Group as quickly, as comprehensively and sustainably as possible," Uebber said.

He offered no direct reply when asked during a conference call if the company is considering selling Chrysler or bringing in a partner.

"We have announced a thorough optimization program. We're looking at all details of the value chain, we're looking at structural changes," he said. "What we need to safeguard is the sustainable profitability of the Chrysler Group and DaimlerChrysler."

Asked if he could say that a sale of Chrysler had been ruled out, Uebber said he could not provide any more information.

"First we do our analysis, then we talk about measures, then we draw conclusions," he said.

The company warned last month of a large loss at Chrysler, but said it would return to profit in the fourth quarter.

"Though a number of new models — the Wrangler, Compass, Aspen, Nitro — are scheduled for imminent launch, Chrysler faces an uphill turnaround task," said Stephen Cheetham, a European auto analyst at Sanford C. Bernstein in London.

Chrysler, like its American rivals, has suffered as high oil prices lead buyers to shift toward smaller cars, away from sport-utility vehicles and other models that use more fuel.

Last month, DaimlerChrysler lowered its 2006 operating profit forecast to around 5 billion euros ($6.3 billion) from its previous forecast of 6 billion euros ($7.5 billion), citing problems at Chrysler.

Looking ahead, the company said it expected a slight decrease in global demand for automobiles in the fourth quarter, but said its overall sales growth for the year should be around 3%, down from the 4% it saw last year.

Because of lighter demand in Japan and the U.S., DaimlerChrysler said it expected its total vehicle sales for 2006 to be less than the 4.8 million it sold in 2005.

 

Maybe MBUSA should bring the SMART program under a Chrysler brand (or a least offer a stripped down version). Call 'um "Dinky's"!

Hemi, Schmemi! See what Americans think of American brands? All the USA auto companies are in the dumper due to the pain they gave us delivering boring, disposable automobiles for the past 30 years or so. Want a nice Ford? Buy a Lincoln... a Volvo with different badges. The good cars "aren't from around here" and WE all know it.

I hate to see the US auto industry fail, but they are asking for it.

 

Yes, they are asking for it.

Chrysler executives are reviewing....
- product strategy
- portfolio management
- capital management
- fixed cost management
- structural changes
- manufacturing
- material costs
- revenue management
- quality

This sort of **** is what Corporate America is good at....and that's exactly what is sinking the ship.

There is only one thing they need to change. Improve QUALITY.

In general, US car designs are really bad. Exterior styling is weird or outdated. Interior fit and trim are horrible. Plastics used are cheap and clunky. Buttons, switches, and ***** are so flintstone! Mechanicals are not reliable. Mechanicals are not reliable. Mechanicals are not reliable. Yes, I said it three times.

Cost-cutting is everywhere in design and manufacturing. Big-3 never intend to build a good car. For example...

(1) All Jap and European cars have lockable fuel door. Red-neck designers at Detroit decided that they save money by not putting the fuel door locking mechanism.

(2) All Jap and European cars have ventilation shut-off switch called RECIRC. Though Detroit cars have lately adopted the design....like I said.....it's too late. In a freakin Detroit car, you always swallow the the dust and grind on a dusty road. Perhaps this is part of red neck machoism....but RECIRC switch in Jap cars are just too sexy for me to not fall for.

(3) Did you notice how much gap there is between the light assembly and the bumpers (both front and back) on a Durango?

(4) Good car always have their antennae on the rear of the car or embedded in the rear window. Detroit junkers try to save money on the length of antenna cable. Look at all the cheap Detroit cars. Antenna(s) are always at the front. (I am not talking about the trucks.)

(5) Most original European and Jap cars have the rear-view mirror strongly mounted on the front edge of the ceiling/roof. If there is any wire that has to go to the mirror, it goes inside the support arm between the roof and the mirror. You never see wires. Heck, in Detroit cars, rear-view mirrors are always GLUED to the windshield. If there is any wire, wires come out dangling from the ceiling to the mirror. What the FXXK?

(6) Seats are a joke. For example, seats in Intrepid are so big and yet not comfortable for neither small nor large people. Rear seats are the worst. They are too reclined. In contrast, C230 seats are comfy for both large and small persons.

(7) While not focusing on the right things......Detroit auto-makers are very good at shampooing the pubes. (You don't need to shampoo your pubes, its an overkill.) I will explain. For example, Daytime Running Lights that cannot be turned off. Aint that a bitch? When is the last time you see a Mercedes or a Lexus cruising around town with DRL?

Big Three should go down like Communism.

 

I agree with most aspects especially with fit and finish but mechanical problems yes with ford and chrysler but know one i know have ever had a GM car break down on them unless the car was seriously abused. Even then i seriuosly abused a 97 grand am 4 years ago to the point i was trying to kill it and it never stopped and everything always worked.

 

I also agree, if Chrysler would simply create a nicely built, reliable car they would have no problems with profit. Instead they want to 'cut costs' by offering cheaper materials and cut production. Just look at the 300 for example. The 300 was absolutely perfect, and everyone knew it. Chrysler just had to ruin it with cheap materials, which dragged sales. They just had to. Now they realize the mistake and are fixing it, but it's too late! It's left a bad image. Also they're using a MB transmission with horrible reliability. Why? They should have known the transmission sucks. I don't even own a 300 or the transmission it's using from MB and I know it sucks....so why wouldn't they know?


Chrysler group shouldn't go up for sale, they just need new executives. The one's we have now just want to ride Chrysler for money, that's why they're cheaping things out. I think some of us would make good executives...

 

MBA masturbation sessions which will spend lost of money. Really, what they are doing is trying to repair the the stock value, not THE CARS!

Any company that manufactures what consumers want will be successful. Auto companies were better off when they were many, and smaller companies specializing in a niche market. As the industry has consolidated into the big 3, we now have only 3 ideas of what a car should be. Not to mention One big *** union pension fund to support with our dollars.

I see from the ashes a few small companies formed by very talented folks creating vehicles that are low labor-high robotic assembled.

Where is the Dodge Challenger MB? You could have made one that gets 25mph-30mph and is out selling the piece of crap Ford Mustang. I was going to look at one, but I am afraid you won't be there to support it.

 

Maybe I'm missing something or what not but what in the world is so hard to about grasping the concept that if a company build good styled, reliable, no RELIABLE, and use a good material, they would not have to worry about profit woes. Yeah as mentioned earlier, the 300 is a prime example of a car that they was so focused on saving a penny that they bolluxed up a car that probably would have other wise taken Chrysler to the top. The thing is nice on the outside, and that what originally brought in the people and sale. Then you get on the inside of that thing and it's like "what the hell". I could've taken half of what I spent and get the same cheap plastic interior but better designed in a darn Kia. And it's not just Chrysler. It's like for a car to qualify as American, it has to be half done or half baked or just look like the top brass didn't want to spend that extra $100. And they wonder why sals are slumping or why is Japan eating them alive? It's not freaking rocket science.
Ford, their designs are so plain, boring, outdated that I can't even drive one of those things or I'll fall alseep behind the wheel or die of bordom. L
Chrsyler, Looks like their cars was put together by a couple of guys with a wrench in a backyard somewhere. Have they ever heard of attention to detail? They have spaces between trim pieces on the outside, creaks, noises, rattles, and all type of stuff. Some of their cars have interesting designs that look like an actual design team sat down and drew up but they tend ruin great concepts and stuff by trying to cut corners and "save money". I like the way the Challenger looks, but I swear, if they mess up that car like they been doing the rest of their memorable designs... I think MBZ should sell em and make them fall of the face of the Earth.
GM, fairly reliable vehicles, but it seems like they could careless on the overall quality of their vehicles unless it's the Corvette. It's like that's all that company focus on, getting the Corvette perfect and forgets about the other cars. I can envision them at GM, when it time to redesign a car, 5 minute meeting, recycle parts from past years, throw it out there and hope people don't catch on. And oh, throw in a few eletronic gadget to keep them from focusing on the quality issues. Plus, I don't like thier idea of putting a freaking tracking device in all of their vehicles.

I guess they don't get that all people are not stupid and/or are not fooled by all that "corporate lingo". We all know the bottom line is that all they really care about is their own pocket and will comtinue putting out BS as long as their pockets are good. That is until Imports completely take over the market, or some Asia company buys GM and or Ford(imagine the Corvette being built by Toyota.) or they get Execs that actually care about the well being and the future of the company instead of just taking up space to fill their pockets. If they make better cars, sales will go up, and when sales go up profits will rise, and when profits will rise, that's more money into the pocket. I guess that's very hard to do because it's not being done. Asia and Europe have mostly caught on to that concept. I understand the concept of cost cutting and stuff but do they have to make it so obvious?