News In Brief
The long-awaited restructuring plan by DaimlerChrysler anticipates additional short-term losses before the giant automaker achieves $8 billion in revenue and cost savings by the end of fiscal 2003, reports said. Senior executives said the cost of returning its money-losing US division to the black would be more than $3.6 billion. Chrysler, they said, would post an operating loss of as much as $2.5 billion this year, on top of the $1.3 billion it lost in the fourth quarter of 2000. In releasing their annual report in Stuttgart, Germany, the executives said DaimlerChrysler's company-wide profit would tumble this year by about 76 percent and revenues by 13 percent. As part of the recovery plan, the company already has announced it will cut 26,000 jobs in the US - the bulk of them by year's end.
Troubled Mitsubishi Motors, which is one-third owned by DaimlerChrysler, also announced a major overhaul to return the company to profitability by the beginning of the 2003 fiscal year. A senior executive said Japan's fourth-largest automaker will eliminate 9,500 jobs - 14 percent of its workforce - discontinue production of high-end and "unprofitable" models "as soon as possible," close at least one domestic assembly plant, and shave spending for materials by 15 percent. The reforms are projected to cost up to $1.3 billion. Mitsubishi is $138 billion in debt, its sales and share price both have slumped, and the company and nine of its executives are under a criminal investigation for decades of covering up complaints about possible manufacturing defects.
Sales of compact-disc singles plummeted last year, with shipments down 39 percent, the Recording Industry Association of America reported. The Washington-based group put at least part of the blame on Napster, the online music-swapping service that has been the subject of intense litigation. But some industry analysts said the drop could be attributed to other reasons, including economic factors and a weak batch of music releases.
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