Chrysler Looks to Streamline

Chrysler said Thursday that it planned to reduce costs by $1,000 per vehicle and was reviewing all its operations after the U.S. unit of German carmaker DaimlerChrysler lost as much as $1.5 billion in the third quarter.

Tom LaSorda, Chrysler’s chief executive, is heading teams “looking at every part of its business,” said spokesman Jason Vines. The effort, dubbed Project Refocus, began in August and includes advice from DaimlerChrysler’s Mercedes and commercial-truck units, he said.

Chrysler is retrenching as U.S. consumers buy fewer of the pickup trucks, sport utility vehicles and minivans that dominate its lineup. The Auburn Hills, Mich.-based unit’s U.S. sales have fallen 9.1% this year, letting Toyota Motor Corp. pass DaimlerChrysler as third in the market. DaimlerChrysler is now the world’s fifth-largest automaker.

“Chrysler still has some room for further consolidations for things such as components in the next round of platforms,” said Michael Robinet, an analyst at consulting firm CSM Worldwide Inc. “But I would be surprised if this wasn’t an ongoing effort and they’re just publicizing it now.”

All major automakers are constantly reviewing their costs, Robinet said.

“This is a brutal market we’re in, and we’re going to make sure we’re in the first tier, period,” Vines said. The review will include manufacturing, purchasing, engineering and sales and will result in changes to be announced by LaSorda, he said. The spokesman declined to say when that would occur.

Executives from the other DaimlerChrysler units who are being consulted include Rainer Schmueckle, chief operating officer at Mercedes, Vines said. Mercedes went through a restructuring that included eliminating 8,500 jobs.

Chrysler is cutting production as much as 17% in this year’s second half because of its sales decline. .