DaimlerChrysler names chief of truck division to take over Mercedes car group
Thursday, July 29th 2004, 6:08 am
By: News On 6
FRANKFURT, Germany (AP) _ DaimlerChrysler's board of directors on Thursday named commercial vehicles chief Eckhard Cordes as new head of its Mercedes division, the company said in a statement.
Cordes will take over for 65-year-old Juergen Hubbert, who will become head of the company's executive automotive committee ahead of his expected retirement in April, 2005.
The 53-year-old Cordes will be replaced at commercial vehicles by Andreas Renschler, 46, head of the company's Smart compact car division.
Cordes, regarded as a close confidant of CEO Juergen Schrempp, has successfully led the truck and bus division through a difficult 3 1/2 years of losses and restructuring that have returned the unit to profitability.
He takes over Mercedes, the company's earnings mainstay, as it comes under increasing pressure from a new-model offensive from German competitor BMW, and from Toyota's luxury make Lexus. Mercedes' profits have helped kept DaimlerChrysler profitable as it has slashed thousands of jobs to cut costs at its U.S. division Chrysler and commercial vehicles.
Analysts say Mercedes needs to cut costs to boost its profit margins, and Hubbert made a start at leaving his successor a trimmer cost structure by pushing employees at the division's flagship plant in Sindelfingen outside Stuttgart to accept what the company says is $600 million annually in labor cost savings. In return, the company promised to guarantee jobs through 2012 and keep production of future versions of its C-Class cars at the plant.
The company originally named Wolfgang Bernhard, No. 2 at Chrysler, as Hubbert's successor. But the company withdrew the appointment in April without giving a reason, although employee representatives said that Bernhard encountered resistance after saying the division needed cost cuts.
The withdrawn appointment left Bernhard hanging without a defined job, and Thursday's statement said he was leaving the company effective Thursday. The statement said that the company ``thanks Bernhard for his achievements on behalf of the company.''
Cordes takes over his new job effective Oct. 1, when Hubbert will take over the executive automotive committee, which oversees the company's efforts to find cost savings through better integration of its different divisions. Then, the company said, Hubbert is to leave top management in April, 2005.