Dieter's Way Forward To "Step 2" For DaimlerChrysler: Stop Hoping, Double Up Production Cuts, Lose Some Money And Take On UAW

"Hope is not the best business strategy."
-Dieter Zetsche, September 19, 2006

We couldn't agree more, Dr. Z. The CEO of the German-American hybrid automaker (pictured, at right, in his best "Whatchu Lookin' At?" pose) spoke truth to power today in his annual "State of DCX" speech to shareholders this morning afternoon morning? (we're not so good with time zones), making clear his gameplan going forward wth the Chrysler Group. A gameplan which has to this point included a decent amount of wing n' prayer in the business strategy as it's pertained to the time needed to move from a product mix heavily reliant upon big SUV's and trucks to a product mix more reliant on the smaller scale stuff.

But the Chrysler Group's still making that switch, as they're now forecasting a doubled-up reduction of production cuts in the 3rd quarter's beginning of the year forecast, from an initial cut of 45,000 units to around 90,000 units. And those numbers, combined with expected and so-far announced cuts would peg a reduction in units of 135,000 from now until the end of the year, dropping market share for the Auburn Hills, MI side of the business from 11.2% of the US market to 10.6%. The biggest reduction is expected to come from idling plants making the Jeep Grand Cherokee and Jeep Commander — the big n' bad SUV's taking the biggest hit in sales as gas prices increased throughout the summer. The production cuts also come on top of last week's news the 'merican side of the cross-Atlantic merger-of-equals would lose $1.5 billion during the same quarter.

On his way to explaining how he'd be reaching "Step 2," Dr. Z. also took a few jabs at the UAW, positing the question of why they'll not be helping out with health care costs until "we've lost $10 billion." We're actually wondering that same question...cause it's probably not the best move for the oh-so-lovable auto union, but meh, since when have they ever cared for how they looked in public?

Seeing Huge Losses, Chrysler Slashes Production [NYT]

Related:
Breaking! DaimlerChrysler Issues A Billion Dollar Profit Warning [internal]