DaimlerChrysler AG said today that the restructuring of its ailing US Chrysler unit would cost some four billion euros ($3.64 billion euros) but should drive it back to profits in 2002.
The world's third biggest automaker by market value after Toyota and Ford said measures to revamp Chrysler should bring cost savings and extra income of 3.3 billion euros in 2001, 5.2 billion euros in 2002 and 7.2 billion by 2003.
Signalling its determination to put the Chrysler crisis behind it, the company said it would book charges of up to three billion euros already in the first quarter, pushing the whole group into the red.
For the full year, adjusted group operating profit would fall to between 1.2 billion and 1.7 billion euros in 2001 from 5.2 billion euros in 2000 as losses at Chrysler are expected to balloon to reach between 2.2 and 2.6 billion euros, it said.
If the revamp goes according to plan, Chrysler will make a profit of over two billion euros in 2003, helping to drive the group result up to 8.5 billion to 9.5 billion euros.
The targets are part of an offensive by chairman Juergen Schrempp to restore investor confidence in a 1998 marriage between the then Daimler-Benz and Chrysler after shock losses at the U.S. carmaker since the third quarter last year.