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DaimlerChrysler to Layoff 26,000 Over Three Years

Aired January 29, 2001 - 11:00 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: More big layoffs to report this morning, and this time it is at DaimlerChrysler. The automaker says it will let 26,000 workers go over the next three years. That's about 20 percent of its North American workforce.

CNN financial news correspondent Fred Katayama has more on this news for us. He's in New York this morning -- Fred.

FRED KATAYAMA, CNN CORRESPONDENT: Well, Daryn, Chrysler is doing this to cut costs and try to get the company back into the black. Now, the company -- senior company executives said today competition is brutal, there is an incentive war going on, and costs are growing rapidly.

Now, specifically, Chrysler is cutting 19,000 hourly workers and 6,800 salaried workers. It will cut -- idle plants in four U.S. states, including Michigan, Ohio, Delaware and Ohio. As for the breakdown, it is expected to complete those cuts, three-quarters of those cuts, by year end.

Chrysler also said it is confident that it can get its suppliers to cut its costs by 5 percent. Now, earlier in December, Chrysler had asked for those cuts at its suppliers, and some of those of those suppliers had balked.

And finally, Chrysler said it plans to complete its turnaround plan by February 26. We expect to hear more details of the second phase of that turnaround plan in mid-February.

I'm Fred Katayama, reporting from New York -- Daryn.

KAGAN: Fred, before we let you go, you know, much has been made lately of the not exactly happy situation in this merger in the German Daimler company and the American Chrysler company. How much of these layoffs is a result of this merger not going so smoothly?

KATAYAMA: Well, a lot of the problems stem at the Chrysler side of DaimlerChrysler, and that's why, Daryn, a lot of the focus here -- basically, the cutbacks are stemming at Chrysler.

And there has been a lot of friction between the two sides. Right now, the head of the DaimlerChrysler -- of -- the Chrysler group president is a German: Dieter Zetsche is his name, and has installed a lot of German executives to take over the Chrysler aspect of the company.

KAGAN: All right, Fred Katayama, in New York, thank you very much

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