S&P: DaimlerChrysler unchanged

Standard & Poor's said its ratings and outlook on DaimlerChrysler AG (BBB/stable/A-2) remain unchanged following the announcement that it is contemplating an extensive restructuring of its loss-making smart business unit.

S&P said the plan's surprisingly steep restructuring expenses highlight the challenges the group faces in putting this fledgling vehicle brand on a more competitive and profitable footing.

Even if all of the plan's measures are implemented, S&P said the company is unlikely to achieve breakeven until 2007. The problems coincide with those at the Mercedes brand operations, which are struggling due to product quality shortcomings and adverse foreign currency fluctuations.

On the other hand, S&P said the Chrysler unit, global commercial-vehicles business and captive-finance operations are all performing well.

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