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German-American auto giant

DaimlerChrysler

(DCX)

confirmed this morning that Chrysler head James Holden will be replaced with Dieter Zetsche and warned that the U.S. division will miss previous forecasts.

In a move that had been rumored for several days, the company confirmed that Zetsche will become president and CEO of Chrysler, effective immediately, as part of a program to reposition and restructure the business.

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DaimlerChrysler, which is based in Stuttgart, Germany, and Auburn Hills, Mich., said Chrysler's results will fall below the last forecast and affect the earnings of whole company. During its third-quarter earnings report last month, the company said it expected Chrysler to return to profitability in the fourth quarter. The company also projected full-year operating earnings of 2 billion euros, compared with 5.1 billion euros in 1999.

Analysts expect DaimlerChrysler to earn 79 cents a share in the fourth quarter, compared with $1.60 a share in the same period last year.

Zetsche, who joined DaimlerChrysler in 1976, has been in charge of development and design of

Mercedes-Benz

passenger cars, as well as worldwide sales and marketing for Mercedes-Benz products. He was also a board member of Mercedes-Benz do Brasil and president of Mercedes-Benz Argentina. The company also named Wolfgang Bernhard as chief operating officer of the Chrysler Group.