The Detroit Free Press says that Chrysler will cut 10,000 jobs and rely on its stable-mate in DaimlerChrysler, Mercedes, to pick up most of the work on product design. The companies may also share important parts that will be common to vehicles for each model line.
The plan could actually work. The company has kept Mercedes and Chrysler separate for the most part, and its has cost billion of dollars to do so. The ongoing lack of cooperation has undercut the reasons for most mergers, and made the purchase of Chrysler something of a lemon in the M&A world.
Daimler’s shares holders have been pushing for a sales of the company. Nissan and Renault would have been candidates. But, the problems at Chrysler have not hurt the parent’s stock. It trades near its 52-week high at $63, up from the one-year low of $45.98.
If the new plan to cut costs and share platforms is attractive to Wall St., DCX shares could go higher.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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