Daimler Chrysler

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ECONOMICS ISSUES PROJECT ? DAIMLER CHRYSLER INTRODUCTION The big three automakers have all had their ups and downs over the years, when it comes to money and market conditions. None have been harder hit than Daimler Chrysler, during the past several months. Much of their distress is being caused by the slowdown in the U.S. economy, which happens to be one of the largest importers of vehicles from Canada. Almost 90% of Canada?s automotive production is exported to the United States, who, in turn, dictate market trends that dominate the auto industry.

Daimler Chrysler is trying desperately to recover from their losses by way of job cuts, plant closures, shift reductions, and decreased production. The first major step they made in the recovery process was firing chief executive officer James Holden, and other senior executives. Dieter Zetsche, who is now in charge of getting Daimler Chrysler back up to profitability, replaced James Holden.

The recovery plan, based on realistic assumptions, was released on February 26, 2000 and in it Mr. Zetsche claims that he can be making a profit by the middle of 2002. Mr. Zetsche has until the end of this year to prove his claims.

Summarized below are collections of articles discussing Daimler Chrysler?s problems, and what they intend to do to recover from them. Following the summary, these articles will be analyzed in great detail, as to how they relate to what I?ve learned about the ?nature of markets? and ?the role of profit?.

SUMMARY OF ARTICLES Article 1: ?Daimler Chrysler Canada to cut 3,000 jobs, part of 26,000 across North America? (National Post Online, January 29, 2001) Chrysler posted a third-quarter loss of $512 million U.S. and believes that the fourth quarter could more than double that, due to the slowdown in the U.S. economy.