Zetsche's team provides some positive results.
After a run of heavy losses totaling almost $6 billion, Daimler AG expects to finish 2009 with a fourth quarter profit.
The German automaker finished the third quarter with a net profit of $60 million despite a steep 26% plunge in sales.
Daimler chief executive, Dieter Zetsche, Chairman crowed that, “In recent months, we have increasingly mastered the crisis. Daimler has been able to maintain its financial flexibility and has intensified the actions taken to enhance efficiency, while pushing forward with the development of new products and markets. We are now very well positioned and can look with confidence to the coming year, which will remain challenging due to the still-difficult situation of automobile markets worldwide.”
Daimler anticipates significant decreases in unit sales and revenue in full-year 2009, compared with 2008’s 2.1 million vehicles and $142 billion.
Bodo Uebber, Daimler’s chief financial officer, said the company has succeeded in cutting both its fixed and material costs and holding down other spending by reducing labor costs and streamlining the company’s organizational structures.
The measures taken are a supplement to the existing efficiency-enhancing programs. Daimler now assumes that it will surpass the original target of saving a total of $5.9 billion in full-year 2009.
Some of the deepest cuts have come in the company’s truck unit, which started closing truck plants in Asia and North America in response to the worst industry sales in two generations.
Overall, the Daimler Trucks unit, which also makes Freightliner vehicles in the U.S. and Fuso models in Asia, had a loss of $180 million in the third quarter compared with profit of $750 million a year earlier. However, the division was Daimler’s only unprofitable business last quarter, Uebber said.
The introduction of an updated E-Class sedan helped stem a sales decline, and has allowed Daimler to scale back spending on sales incentives.
Daimler’s suppliers have their own financial struggles, which forced Daimler to extend assistance and reduced the company’s earnings this year by roughly $90 million, Uebber said. The lingering effects of the recession on component manufacturers as well as auto dealers could have a “negative impact” on profitability in the fourth quarter.
Daimler also could take a $120 million charge in the fourth quarter for costs related to the reorganization. Because of the charges and “persistently weak” markets in Europe and North America, the trucks unit’s loss may deepen in the final three months of 2009, the company said.
Mercedes-Benz Cars scaled back production by 30% in the first nine months of 2009, outpacing a 20% drop in vehicle sales in the period. Truck production was reduced 55% as sales fell 47%.