DaimlerChrysler chairman, Dieter Zetsche, has written to employees appealing for their trust, according to the Frankfurter Allgemeine Sonntagszeitung newspaper.

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The move follows a profits warning at the end of last week, which lowered the company’s full year operating earnings expectation, because of a worse than expected third quarter loss at Chrysler.


Zetsche described the situation at Chrysler as unsatisfactory after already difficult market conditions had worsened . Chrysler had previously forecast a third quarter loss of EUR0.5bn but the latest profit warning increased this to EUR1.2bn.


In his letter to employees, Zetche explained that Chrysler is launching eight new models in coming months that will better meet changing consumer demands. On-going improvements in flexibility and quality, combined with the wide-ranging product offensive, should bring the Chrysler group back on to the right path, he said.


Zetsche blamed the bad results in America on high petrol prices and hefty incentives. He said there is a trend towards smaller cars with lower fuel consumption and Chrysler has been hit hard because it depends heavily on sales of light trucks, particularly SUVs and pick-ups.

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Zetsche added that healthcare costs at Chrysler are not competitive and that discussions are under way with unions. Earlier last week, unions including the powerful United Auto Workers (UAW) decided not to give Chrysler healthcare concessions similar to those previously made to GM and Ford, because they concluded that the situation at Chrysler was not as bad as at its competitors.