Mercedes 2002 Annual Report Download - page 75

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launch in April 2003, and for a new four-seater (forfour) being
designed and manufactured in collaboration with Mitsubishi
Motors, which is scheduled for launch in 2004, had a negative
impact on operating profit.
Positive operating results posted at Chrysler Group
Chrysler Group achieved an operating profit of 10.6 billion in
2002 compared to an operating loss of 15.3 billion in the prior
year. The 2002 operating profit includes restructuring charges
of 10.7 billion while the 2001 operating loss includes restruc-
turing charges of 13.1 billion resulting from the turnaround
plan implemented in February 2001 in response to an increas-
ingly competitive and weakening US automotive market.
The turnaround plan is designed to improve Chrysler Group’s
financial performance and market position. The restructuring
charges in 2001 primarily related to workforce reductions,
asset write-downs and contract cancellation costs. The addi-
tional restructuring charges recognized in 2002 were for costs
associated with the idling, closing or disposal of certain manu-
facturing facilities and ongoing workforce reduction measures
as well as revisions of estimates based upon information
currently available or actual settlements. The operating profit
in 2002 also includes impairment charges of 114 million while
the operating loss in 2001 includes impairment charges of
134 million allocated to Chrysler Group relating to Daimler-
Chrysler’s e-business activities.
Adjusted to exclude one-time effects, the 2002 operating
profit amounted to 11.3 billion (2001: 12.2 billion loss). This
significant improvement was primarily the result of cost reduc-
tions and other actions taken as part of the turnaround plan,
lower customer satisfaction costs and increased shipments,
partially offset by net vehicle price reductions. The net vehicle
price reductions are the result of higher vehicle pricing which
was more than offset by higher sales incentives attributable to
intense competitive pressures in the North American market.
Consistent with industry patterns, US dealer inventory
levels rose from 442,000 units at December 31, 2001 to
517,000 units at December 31, 2002. The Chrysler Group
market share in the US and Canada decreased slightly in 2002
compared to 2001.
Improved earnings in the Commercial Vehicles segment
through rigorous restructuring
The Commercial Vehicles segment posted an operating loss of
10.3 billion for the current year (2001: 10.5 billion). Due
principally to the continued weakness of the global commer-
cial vehicle markets, personnel restructuring measures were
initiated in the Mercedes-Benz Trucks, DaimlerChrysler Power-
systems and DaimlerChrysler Buses and Coaches business
units in 2002, which resulted in one-time charges of 10.3
billion. These charges also include exit costs of a production
plant in Mannheim. The restructuring program at the Freight-
liner, Sterling and Thomas Built Buses business unit, initiated
in the previous year, resulted in further charges in 2002. In
addition, impairment charges of 10.2 billion were incurred in
connection with the partial sale of a subsidiary as well as with
a change in the long-term product and production strategy.
Analysis of the Financial Situation |69
In millions
One-Time Effects included in Operating Profit (Loss) by Segments
2002
US $
2002
3
2001
3
–
–
(742)
(728)
(14)
(544)
(276)
(268)
2,198
2,605
(295)
(112)
163
163
–
–
1,075
In millions
Operating Profit (Loss) adjusted for One-time Effects
2002
US $
2002
3
2001
3
5,073
1,039
6,112
4,838
991
5,829
782
563
1,345
Industrial Business
Financial Services
DaimlerChrysler Group
Mercedes Car Group
Impairment charges
Chrysler Group
Turnaround plan
Impairment charges
Commercial Vehicles
Restructuring charges
Impairment charges
Services
Gains on disposals of business
Impairment charges
Economic crisis in Argentina
Other Activities
Dilution gains and gains on
disposals of businesses
Restructuring charges
Impairment charges
DaimlerChrysler Group
–
–
(708)
(694)
(14)
(519)
(263)
(256)
2,096
2,484
(281)
(107)
156
156
–
–
1,025
(10)
(10)
(3,098)
(3,064)
(34)
(565)
(534)
(31)
34
292
(166)
(92)
976
1,335
(351)
(8)
(2,663)