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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December, 2000
DAIMLERCHRYSLER AG
(Translation of registrant's name into English)
EPPLESTRASSE 225, 70567 STUTTGART, GERMANY
(Address of principal executive office)
[Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.]
Form 20-F X Form 40-F
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[Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.]
Yes No X
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[If "Yes" is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b): 82- ]
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This report on Form 6-K is hereby incorporated by reference in the
registration statement on Form F-3 of DaimlerChrysler North America Holding
Corporation (Registration Statement No. 333-11306)
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DAIMLERCHRYSLER AG
FORM 6-K: TABLE OF CONTENTS
1. Letter to the shareholders of DaimlerChrysler AG, dated December
18, 2000
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DAIMLERCHRYSLER
December 2000
Dear Shareholder,
The last few weeks have seen a high level of interest in DaimlerChrysler, with a
focus in particular on our Chrysler business. Under the circumstances we thought
that it might be useful to set out the situation for you as we see it.
Over the last five years, we have completely restructured and refocused the
DaimlerChrysler Group, from a diversified industrial company to one of the
world's leading automotive manufacturers. In the process, we have shed not only
a number of loss-making and non-core operations, but we have also considerably
improved the cost structure of our automobile operations in Germany. This has
been possible thanks to the dedication and flexibility of our workforce. Our
goal remains to be the world's leading and most profitable automobile
manufacturer.
As we anticipated five years ago, the past three years have seen further
consolidation in the automotive industry, and a surge of alliances and
partnerships. Through the merger between Daimler-Benz and Chrysler,
DaimlerChrysler led this process. We followed through - in our partnerships with
Mitsubishi Motors Corporation and Hyundai Motor Company - with moves to position
ourselves in the fast growing markets of Asia.
Although Chrysler is going through a challenging period right now, we are
confident that the Chrysler merger, the alliance with Mitsubishi Motors and the
acquisition of a stake in Hyundai will bring us the world-wide growth
opportunities and the economies of scale we need in order to create long-term
shareholder value.
We are now present in all major world markets, we have brands and products to
appeal to a very wide variety of customers world-wide, and our product offensive
continues. Over the next five years, we will renew more than 80% of our product
range by launching up to 60 new models and our Asian partners will be
modernizing their products in co-ordination with us. Different brands will
develop different models for different regions but where appropriate share
components and systems. Synergies such as these will improve our margins,
reinforce our ability to innovate, and strengthen the loyalty of our customers.
For example, in Germany eight out of ten Mercedes-Benz customers buy another
Mercedes-Benz.
In 1999, the year following the merger of Daimler-Benz and Chrysler,
DaimlerChrysler reported an operating profit of Euro 10.3 billion (adjusted
for one-time effects) and Chrysler reported an operating profit of Euro 5.2
billion. For the Group as a whole this was a record and for Chrysler it was
their second-highest profit ever.
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This year, Mercedes-Benz Passenger Cars & smart and Commercial Vehicles have
continued to perform well, but Chrysler's performance has become particularly
challenging since the summer. Preliminary estimates suggest that, despite losses
in the third and fourth quarters, Chrysler is likely to achieve an operating
profit of around Euro 500 million for the year. DaimlerChrysler as a whole
expects to announce an operating profit of between Euro 9.5 billion and Euro
10 billion, including one-time items, which are likely to total Euro 4.5
billion.
Mercedes-Benz Passenger Cars is expected to produce a record level of earnings,
despite significant R&D costs for new models to be launched in the next few
years. The production start-up of the new C-class was extremely rapid, enabling
us to sell 47,600 new C-class vehicles in the third quarter. Next year, we will
bring to the market the new SL as well as two additional variants of the C-class
(the station wagon and the sports coupe) and, in 2002, we will launch the next
E-class, the CLK successor coupe and the ultimate in luxury, the new Maybach.
Commercial Vehicles is an excellent example of our approach to global and
segmental diversification. This year we have been able to offset the downturn in
the US heavy truck market with a successful performance in the European and
emerging markets and within the van business. Thus, while the outlook for unit
sales for the year as a whole is a little lower than last year, we expect
earnings to be slightly higher. In the future, we also expect to develop our
commercial vehicles business through opportunities provided by our Asian
alliance.
The Services business has had a challenging year, especially in the third
quarter, due to pressure on residual values in the US, but we have tightened up
our control systems and our marketing measures for used vehicles. We are
confident that this business has an important role to play in cementing
long-term relationships with customers.
During the course of the year, we have also taken further important steps to
focus our operations on the core automobile business. We have exchanged shares
in Dasa for a stake of more than 30% in EADS, whose shares have risen by more
than 20% since the IPO in July, Deutsche Telekom has taken a 50.1% stake in
debis Systemhaus, our IT services company, and we have announced the sale of
Adtranz to Bombardier. We will record substantial capital gains from these
transactions, which will result in significant one-time effects.
We have also considerably strengthened our commercial vehicle business through
the acquisitions of Western Star, a Canadian truck maker, and the outstanding
shares in Detroit Diesel, a US truck engine manufacturer. In summary, through a
series of strategic acquisitions and divestitures, we have positioned the Group
to be a world-class automobile manufacturer.
Turning now to why the situation at Chrysler began to worsen during the course
of 2000, the reasons for this were two-fold:
Firstly, competitive pressure in the US automotive market increased
significantly, as evidenced by the strong rise in sales incentives or discounts
which are up by over one third compared with a year ago, and are almost three
times what they were in 1997.
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Secondly, Chrysler faced a number of specific challenges. We launched several
major new products - the new minivan, the PT Cruiser, the Dodge Stratus and the
Chrysler Sebring and convertible - this is good but launching so many products
in such a short space of time is expensive. New products entail significant
up-front costs, both in terms of marketing spend on the new product and the need
to offer discounts on the old product to clear stock levels.
Chrysler has also been hurt by the unusually fierce nature of the competition
that has occurred in the historically profitable niches in which it has
operated; the minivan, the sports utility and the pick-up truck segments. Our
competitors recognized the profitability of these segments, entered with new
products and increased capacity. Chrysler did not adjust its cost structure
sufficiently to take into account the changed conditions in the market.
Decisive action has now been taken to solve the situation at Chrysler. On
November 17th with the approval of the Supervisory Board significant changes
were made to the Chrysler top team addressing our very serious concerns about
the performance of the business. Dieter Zetsche, the new President/Chief
Executive Officer of Chrysler, and Wolfgang Bernhard, the new Chief Operating
Officer, have been chosen to lead the Chrysler team because of their past
successes at DaimlerChrysler. Dieter Zetsche, Wolfgang Bernhard and all the
employees at Chrysler have our full support.
The management team has a wide-ranging mandate to reposition and restructure the
Chrysler business to enable it to regain its strong market position and to
become highly profitable again. Already we have begun to take the tough
decisions necessary to restore the business to full financial health; we have
cut production to a more realistic level to reduce inventories and we will
rigorously examine every part of the value chain. The management team will
report fully on their plans in late February and we will share these findings
with you at the time of the announcement of our full year results on February
26th.
In order to restore Chrysler to profitability as soon as possible what is
already clear is that we must restructure the business - this will bring with it
a cost. This expenditure however should also ensure DaimlerChrysler maintains
its position at the forefront of the modern automotive industry.
In addition, Mitsubishi Motors in which we have a 34% stake (consolidated at
equity) will refocus its business over the coming year. Again, we will give more
detail of this at the time of the announcement of our full year results.
In 2001 we believe that the competitive market environment will continue to
intensify and that our underlying financial performance, particularly in the
United States, will reflect this. Indeed, if the automobile industry, especially
in the US, becomes weaker in 2001 we will face a year which is even more
challenging than 2000. We have no doubt, that our strong overall financial
position will allow us to overcome the current difficult transition period
within our business.
Recently several lawsuits have been filed in the United States making various
allegations about the 1998 Chrysler merger. We are firmly convinced that these
claims are without basis in fact or law and will vigorously defend against them.
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At DaimlerChrysler we share a vision for the future. A future in which we
continue to do what we have always done so well - but do it better. By pooling
the energy and experience of our talented people and of the highly successful
brands we have built. By developing and leveraging our global resources and
operations to build, and offer, the world's best cars and trucks, in all
segments and for all markets. This is how we plan to deliver sustainable,
long-term growth in the value of your investment in DaimlerChrysler. In all of
this, your continued support for DaimlerChrysler will be crucial to the outcome.
Yours sincerely,
DaimlerChrysler AG
/s/ Juergen Schrempp /s/ Manfred Gentz
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Juergen Schrempp Manfred Gentz
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DaimlerChrysler AG
By: /s/ ppa. Hans-Georg Bruns
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Name: Dr. Hans-Georg Bruns
Title: Vice President
Chief Accounting Officer
By: /s/ i. V. Robert Koethner
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Name: Robert Koethner
Title: Director
Date: December 18, 2000
