UPDATE 2-DaimlerChrysler CEO offers to resign -sources


(Releads with sources, adds more background)

By Mark Thompson and Tom Brown

FRANKFURT/DETROIT, April 28 (Reuters) - DaimlerChrysler Chief Executive Juergen Schrempp offered to resign last week over a management revolt against his plan for a global autos group, sources close to the situation said on Wednesday.

"He offered to resign," said one source. A second source also said Schrempp had offered to resign, adding that "one could assume" the offer would be discussed at a group supervisory board meeting in New York starting at 1400 GMT (10:00 a.m. EDT) on Thursday.

Germany's Frankfurter Allgemeine Zeitung newspaper earlier reported that Schrempp had offered to resign but that the supervisory board had postponed the issue to Thursday's meeting.

A spokesman at DaimlerChrysler's Stuttgart headquarters declined to comment. A spokesman said on Monday reports that Schrempp's future would be discussed this week were "nonsense."

Schrempp, who has not yet commented in public on the group's decision last week to cut off all financial support to Japanese partner Mitsubishi Motors Corp. and review its strategy in Asia, could not be reached for comment.

Citing company sources, the newspaper said that Daimler's trucks boss Eckhard Cordes and head of group strategy Ruediger Grube had also tendered their resignations to the supervisory board last week.

The moves came as a result of the group's decision to cut the financial cord to 37 percent-owned Mitsubishi Motors, which blew a gaping hole in the company's Asian strategy and left Schrempp's dream of building a global autos group in disarray.

Grube and Cordes both helped Schrempp engineer Daimler's expansion from a German luxury carmaker to a "World Inc." global operation through the merger with Chrysler -- the U.S. carmaker that has cost billions of dollars in losses and charges -- and the acquisition of the Mitsubishi stake.


Analysts and investors have said that the decision to pull the plug on Japan's only unprofitable auto maker was an admission that the strategy backfired on DaimlerChrysler, which has seen its market value plunge by 40 billion euros ($47.60 billion) since the Chrysler merger.

The entire "World Inc." strategy is now under review, and the number of Schrempp's colleagues in management that still champion it has shrunk to a minority, the Frankfurter Allgemeine reported.

Daimler's board only this month extended Schrempp's contract by three years, and fears for its own reputation mean the Daimler CEO still has powerful allies, the paper reported.

Dealing a further blow to the group's ambitions in the fast growing Asian auto markets, Hyundai Motor Co. said on Monday that it planned to scale back its partnership with DaimlerChrysler, which owns a 10 percent stake in South Korea's top automaker.

Schrempp left it up to finance chief Manfred Gentz to explain the strategy U-turn in a teleconference with reporters and analysts on Friday. Gentz will also field questions about the group's quarterly earnings in a teleconference on Thursday.

A Reuters poll of 24 analysts suggests DaimlerChrysler will post a 2 percent decline in first-quarter operating profit. Chrysler is seen posting a 6 percent rise in operating profit. A positive surprise at the U.S. unit could provide Schrempp with some badly needed good news. (Additional reporting by Christiaan Hetzner and Alexander Huebner)



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