Chrysler asks suppliers for larger price reductions over next three years

AUBURN HILLS, Mich. (Dec. 11)—The Chrysler Group of DaimlerChrysler A.G. yesterday made public its two-phased plan to cut its material and supplier service costs by over the next three years. Effective Jan. 1, the car maker expects its suppliers to reduce the prices their prices by 5 percent rather than the traditional 3 percent it previously requested. In the second phase of the cost-cutting plan, Chrysler Group President and CEO Dieter Zetsche said the company will look for another 10 percent savings over the two-year period from 2001 through 2002. Chrysler procurement staff, management and engineers will spend six to eight weeks with one or more suppliers at a time to improve material costs. Within one year, at least 150 suppliers representing over 75 percent of the car maker´s annual purchases will be expected to complete Phase 2.