3 More American Execs Forced Out at Chrysler

The new German management at Chrysler, dispatched by DaimlerChrysler to fix its struggling U.S. unit, put themselves more firmly behind the wheel Monday by forcing out three top American executives.

Gone are Chief Administrative Officer Kathleen Oswald, one of the auto industry’s highest-ranking female executives; Theodor “Ted” Cunningham, Chrysler’s executive vice president of global sales and marketing; and Antonio “Tony” Cervone, head of Chrysler’s global communications, the auto maker said.

Cervone, who was replaced by Ken Levy, a former European spokesman for General Motors Corp., declined to comment, and the other two could not be reached. The company said Cervone resigned and the other two retired, but sources said they were forced out.

Chrysler said Oswald’s job would not be filled and that a successor to Cunningham would be named later. Cervone had returned to Chrysler from GM a little more than two months ago.

Cunningham was in charge of fighting the incentive battles in the United States this year. The company tried to back off its incentives in the spring but saw sales plunge. Then, while ramping up to build new models of its key minivans, Chrysler had to offer incentives of as much as $4,000 per vehicle on its old models to keep buyers interested.

DaimlerChrysler’s stock hit a new 52-week low Monday as it fell $2.75 to close at $40.10 on the New York Stock Exchange. The auto maker’s stock has fallen steadily since hitting its all-time high at a little more than $108 a share two months after Daimler-Benz acquired Chrysler for $36 billion in November 1998.

With DaimlerChrysler Chairman Juergen Schrempp at Chrysler’s suburban Detroit headquarters to smooth the transition, Dieter Zetsche took over as president and chief executive from James Holden, who was forced out Friday. Wolfgang Bernhard is the new chief operating officer.

All three German executives met Monday afternoon with 400 top Chrysler managers for two hours.

Schrempp apologized for his recent comments to the Financial Times and the resulting emotional damage at Chrysler, according to people at the meeting. He told the paper he lied to Chrysler executives in 1998 about the deal being a “merger of equals” so he could get it done.

The management changes come amid rumors that strong measures will be used to push Chrysler into profitability, including white-collar layoffs or unpaid leaves of absence and temporary or permanent plant closures.

The U.S. unit already had delayed or canceled several new products after 2004, although Schrempp said plans won’t be changed to Chrysler’s detriment.

Chrysler lost $521 million in its third quarter, and the Wall Street Journal has said the unit will lose even more in its fourth quarter and $2 billion next year.