Though the decision to cancel its roadster model at the end of the year and plans for the new ForMore SUV altogether might put the future of Smart in jeopardy in the U.S., the key element of DaimlerChrysler's plan to save the brand in general should have no immediate affect in Canada.
That would leave Canada with one model -- the diesel-powered ForTwo in its coupe and cabriolet versions -- and the world with that model and the ForFour sedan.
''Our structure is already very much set up this way,'' notes JoAnne Caza, director of marketing for Mercedes-Benz Canada.
These are the key product decisions in what DaimlerChrysler calls the ''New business model for Smart,'' which calls for the Stuttgart firm to spend Euro 1.2 billion more this year as part of the effort to get its microcar division to a break-even point in 2007.
As a result of these decisions, a lot of people will lose their jobs.
According to the plan, ''The new product concept calls for the intensified development of the successor to the Smart ForTwo, including fulfilling the requirements for the U.S. market. The next generation of the three-cylinder gasoline engine will also be used by other manufacturers, with resulting economies of scale that will substantially improve the cost position of this engine project.''
Cooperation with Mitsubishi Motors on the Smart ForFour will be continued, the company said, and ''measures to be taken to improve profitability mean that this product will break even in the future.''
A key component of the new business model is a restructuring program with which earnings are to be increased by ''some Euro 600 million in the year 2007. It will be possible to reduce fixed costs by around 30 percent within the next two years, while substantially improving productivity.''
The new business model also includes a fundamental organizational change, since some of the microcar division's ''key tasks in development, sales, procurement, after sales and service will be integrated into the respective areas of Mercedes-Benz Passenger Cars. This will allow substantial synergy effects to be realized.''
That also means more jobs lost in Europe.
The plan also calls for ''additional sales and market potential to be explored.'' For example, to boost unit sales, the number of Smart outlets in the Mercedes-Benz sales organization will be increased by about 25 percent using the shop-in-shop concept.
Overall, DaimlerChrysler assumes that the restructuring expenses incurred in 2005 will total up to Euro 1.2 billion, which includes exceptional write-downs on plant and equipment, the ''settlement of obligations to third parties,'' and other value adjustments.
The substantial exceptional expenses in connection with the new smart business model will impact DaimlerChrysler's earnings forecast for 2005. Excluding the exceptional charge from smart, DaimlerChrysler, after a weaker first and second quarter, still expects a slightly higher operating profit for full year 2005 compared to 2004.
photo:Mercedes-Benz AG
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| smart fortwo cabrio (photo : Mercedes-Benz AG) |
''Our structure is already very much set up this way,'' notes JoAnne Caza, director of marketing for Mercedes-Benz Canada.
These are the key product decisions in what DaimlerChrysler calls the ''New business model for Smart,'' which calls for the Stuttgart firm to spend Euro 1.2 billion more this year as part of the effort to get its microcar division to a break-even point in 2007.
As a result of these decisions, a lot of people will lose their jobs.
According to the plan, ''The new product concept calls for the intensified development of the successor to the Smart ForTwo, including fulfilling the requirements for the U.S. market. The next generation of the three-cylinder gasoline engine will also be used by other manufacturers, with resulting economies of scale that will substantially improve the cost position of this engine project.''
Cooperation with Mitsubishi Motors on the Smart ForFour will be continued, the company said, and ''measures to be taken to improve profitability mean that this product will break even in the future.''
A key component of the new business model is a restructuring program with which earnings are to be increased by ''some Euro 600 million in the year 2007. It will be possible to reduce fixed costs by around 30 percent within the next two years, while substantially improving productivity.''
The new business model also includes a fundamental organizational change, since some of the microcar division's ''key tasks in development, sales, procurement, after sales and service will be integrated into the respective areas of Mercedes-Benz Passenger Cars. This will allow substantial synergy effects to be realized.''
That also means more jobs lost in Europe.
 |
| smart fortwo coupe (photo : Mercedes-Benz AG) |
Overall, DaimlerChrysler assumes that the restructuring expenses incurred in 2005 will total up to Euro 1.2 billion, which includes exceptional write-downs on plant and equipment, the ''settlement of obligations to third parties,'' and other value adjustments.
The substantial exceptional expenses in connection with the new smart business model will impact DaimlerChrysler's earnings forecast for 2005. Excluding the exceptional charge from smart, DaimlerChrysler, after a weaker first and second quarter, still expects a slightly higher operating profit for full year 2005 compared to 2004.
photo:Mercedes-Benz AG
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