Back in the 1980s and 1990s, we were bombarded with books on Japanese management techniques. Well, it's 2006, and DaimlerChrysler
The press release reads like Japanese Business Management 101. The company wants to "enhance competitiveness and promote further profitable growth" while it "further integrates the company's functions" and "reduces redundancies and remove management layers." Yawn. You kinda have to wonder why this wasn't done years ago.
But the company is trying to build a future that mirrors 2005 -- a year when 17 new products were launched. If you, like me, enjoy the fresh look that DaimlerChrysler is bringing to its automobile lines, you'll be pleased to learn that the company plans to continue the aggressive investments that have produced fresh automobile products.
To control costs, the company will centralize functions like finance, human resources, and strategy. This is what many expected when Daimler merged with Chrysler in 1998. But if you read the 1998 press releases now, the goals stated then look much the same as the ones announced today -- sharing know-how in engineering and manufacturing.
The company also plans to work outside its own organizational structure to achieve its goals. For example, Mercedes-Benz and Chrysler engineers are working side by side with General Motors
A big dollar savings will come from a 20% reduction in the general and administrative (G&A) staff over the next three years. Like General Motors and Ford
DaimlerChrysler trades for 12.3 times expected 2006 earnings and pays a healthy 3.8% dividend. That's a realistic valuation, given that analysts expect the company to grow earnings by 6.1% annually for the next five years. It seems investors like the moves; the company's stock is up 4.8% today and is within a dollar of its 52-week high.
Bayerische Motorenwerke, better known as BMW, is a Motley Fool Stock Advisor recommendation.
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