Chrysler to Post $1.25 Billion Loss
FRANKFURT, Germany (Reuters) - Chrysler, the struggling U.S. unit of German automaker DaimlerChrysler AG (NYSE:DCX - news), is set to double its losses in the fourth quarter of this year, a German newspaper reported on Sunday.
The authoritative Frankfurter Allgemeine Zeitung, in an article released in advance of Monday's edition and sourced to Frankfurt financial circles, said Chrysler would post a loss of $1.25 billion in the fourth quarter. Chrysler lost $512 million in the third quarter.
The paper also said DaimlerChrysler chief Juergen Schrempp would send a letter to shareholders on Monday warning that the operating profit of the entire DaimlerChrysler group would be halved in its 2000 financial year. The letter would ask for their continued confidence.
A spokesman for DaimlerChrysler, contacted by Reuters on Sunday, declined to comment on the figures in the report. But he did confirm that the company planned to send a letter to shareholders on Monday, although he would give no details.
The Frankfurter Allgemeine said the fourth-quarter loss by Chrysler would leave the company with a small full-year operating profit of 500 million euros ($448 million) compared to 5.2 billion euros last year.
Schrempp was also expected to explain in the letter that DaimlerChrysler's operating profit in its 2000 financial year, adjusted for one-off effects, would fall to 5.0 billion-5.5 billion euros from 10.3 billion euros in 1999 and that 2001 would present an even tougher challenge, the newspaper added.
CHRYSLER UNDER PRESSURE
If the newspaper report proves to be accurate, the news would deal an additional blow to Chrysler, which on Friday announced that it will idle three U.S. plants and part of a fourth in early January in an effort to cut bloated inventories.
The shutdowns will idle some 13,200 workers, a Chrysler spokesman said.
Chrysler's performance has also brought Schrempp under increasing fire from shareholders over his admission that the 1998 ``merger of equals'' between then-Daimler Benz and Chrysler Corp. was effectively a takeover of the U.S. carmaker.
American billionaire Kirk Kerkorian is suing DaimlerChrysler for $9 billion for allegedly misleading shareholders.
Chrysler's losses have slashed the value of DaimlerChrysler's shares and led many to question the logic of the merger, which Schrempp once billed as a ``marriage made in heaven.''
DaimlerChrysler's stock closed up 49 cents at $43.49 a share in trading on the New York Stock Exchange on Friday, above its 52-week low of $37.90 and off its high of $78.6875, as well as its all-time high of $108 a share in January 1999. |
