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DaimlerChrysler Board Weighs Restructuring Plans
By Hans Greimel   Associated Press
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FRANKFURT, Germany — The supervisory board of DaimlerChrysler AG met Friday to weigh what are reportedly radical reforms at the automaker's troubled Chrysler division and Mitsubishi Motors Corp. affiliate.

The plans will be officially unveiled during a news conference Monday at which the world's fifth-biggest auto company is also expected to detail fourth-quarter losses at Chrysler that could double the division's $512 million loss recorded for the third quarter.

The plans, which are reported to include as many as 8,000 layoffs at Mitsubishi, a management shakeup across the company and a mandate for greater parts sharing between Chrysler, Mitsubishi and Mercedes-Benz, are expected to win approval Friday from the company's 20-member non-executive supervisory board.

DaimlerChrysler spokesman Michael Pfister has refused to give details of the makeover before Monday. As speculation swirled about the reform plans, investors sent DaimlerChrysler shares falling 3.29 percent to 52.90 euros ($48.14) in midday Frankfurt trading.

DaimlerChrysler launched its restructuring plan last month, saying it would slash 26,000 jobs, or one-fifth of its work force at its U.S.-based Chrysler division, over the next three years and idle six Chrysler plants.

Since then, German and Japanese news reports have said Mitsubishi, which is 34 percent owned by DaimlerChrysler, is coming under pressure from Stuttgart-based DaimlerChrysler to eliminate some 6,000 to 8,000 of its 65,000 workers worldwide, scrap about 10 of its 24 passenger car models and close one or two factories.

DaimlerChrysler will also overhaul its management, introducing a new "executive automotive committee" to oversee the group's Mercedes-Benz, Chrysler and commercial vehicle divisions, as well as its alliance with Mitsubishi, according to The Financial Times Deutschland.

The committee, to be headed by chief executive Juergen Schrempp, would replace the current system of separate automotive, sales and marketing councils. It would also cement Schrempp's power over the group, the newspaper said.

Meanwhile, DaimlerChrysler's supervisory board is expected to review plans to put Mercedes engines in some Chrysler models for the U.S. market, according to the Wall Street Journal Europe. That move would be a dramatic departure from the company's long-held philosophy of keeping brands separate and distinct.

While it could help the company squeeze extra savings and give the Chrysler brand a boost, critics worry it could dilute the Mercedes mystique — and make people less willing to pay more for a Mercedes when they can get similar quality from lower-priced Chrysler.

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