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Chrysler's Troubled MarriageAired December 27, 2000 - 4:39 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: One of the biggest automakers in the U.S. faces some growing problems. Chrysler was the go-go car company of the '90s, with big sales, big profits and big ideas. Then, Chrysler got married. As CNN's Detroit bureau chief Ed Garsten now reports, that's when the trouble started.
ED GARSTEN, CNN CORRESPONDENT (voice-over): Gene Ellefson is a corporate headhunter for the automotive industry. He regularly receives resumes from engineers and sales and marketing types, but lately, there's been a glut from employees of one car company in particular.
GENE ELLEFSON, PLACEMENT SPECIALIST: Over the last several weeks, we've received probably twice as many resumes from Chrysler employees than we have had historically.
GARSTEN: Two years after merging with German automaker Daimler- Benz, the once-successful, nimble car company had suddenly hit hard times -- a third-quarter loss of $512 million, the temporary layoff of more than 19,000 production workers, and the threat of white-collar job reductions.
BILL VLASIC, "DETROIT NEWS": There's so much uncertainty about careers, about futures at the company that people are looking harder, and examining options in more depth than they ever had before.
GARSTEN: Virtually all of Chrysler's U.S. top management team was either fired, retired, or fled to other jobs and replaced by Germans, including new Chrysler Division CEO Dieter Zetsche.
DIETER ZETSCHE, CEO, CHRYSLER DIVISION: What I can tell you is that we will and we have to do everything which is needed in order to make this company profitable again.
GARSTEN: Adding to the company's troubles: a $9 billion lawsuit filed by its largest shareholder, investor Kirk Kerkorian, who seeks to unravel the merger. Shares of DaimlerChrysler have lost more than half their value since January of 1999. In a letter to shareholders, DaimlerChrysler management said it is convinced the lawsuits "are without basis in fact or law and will vigorously defend against them."
(on camera): As down as the Chrysler Division may be right now, industry watchers say, with new management and a line up of news products just about ready top hit the markets, turnaround might be just around the corner.
(voice-over): But that turnaround won't be easy for CEO Zetsche.
VLASIC: He doesn't have two to three years to turn this company around. They need to take the painful medicine early on in the year 2001.
GARSTEN: Including killing the expensive launch of a new, full- size SUV and the hemi-convertible, a crowd pleaser at last year's Detroit Auto Show.
But insiders say, no matter what products the German management team preserve, they will always carry the Chrysler name.
Ed Garsten, CNN, Auburn Hills, Michigan.
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