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DaimlerChrysler solution could take months, workers told

DETROIT (Reuters) — Chrysler Group chief executive Tom LaSorda has told employees of the struggling automaker that it might take months before questions about a possible sale of the unit of DaimlerChrysler AG could be answered.In an e-mail sent to Chrysler employees, LaSorda said he was writing to respond to the “frenzy of rumours” that has enveloped the automaker since last week, when executives said all options — including a sale — were open.

Chrysler, which lost $1.48 billion last year as its inventory ballooned, last week also announced plans to cut 13,000 jobs and close a Delaware assembly plant.

In his note, LaSorda urged Chrysler staff to focus on carrying out that restructuring plan, which is aimed at restoring the automaker to profitability by 2008.

“Whatever fork in the road we may take, we first have to make sure we’re on the road,” he said.

LaSorda said Chrysler employees would begin to receive details on buyouts and early retirement incentives being offered in “the next few days”.

But he cautioned that it would take longer for DaimlerChrysler to be able to provide answers on other issues related to a potential sale. “It may take weeks or months before official comments can be made on some issues,” LaSorda said.

Chrysler Group spokesman Jason Vines said LaSorda was also meeting with Chrysler dealers yesterday to address the questions some of them had begun putting to executives.

Reports began to surface last week that General Motors Corp. was in negotiations to buy Chrysler outright, just days after DaimlerChrysler chief executive Dieter Zetsche said all options were on the table for Chrysler, which represents the Chrysler, Dodge and Jeep brands.

Sources familiar with the situation told Reuters that GM had conducted preliminary talks with Chrysler aimed at an acquisition or a strategic alliance.

Analysts have said any GM acquisition of Chrysler would require further deep cuts in production capacity, payrolls, product line-ups and dealer numbers to succeed.

“We simply cannot respond to these reports,” LaSorda said in his staff email. “The board of management has a duty to consider all options, but while this process is ongoing, the board — including myself — can’t comment on developments because of strict legal requirements.”

LaSorda has made repairing strained relations with Chrysler’s dealers a key priority after taking over direct responsibility for the automaker’s sales operations late last year.

Several dealers have said the sudden prospect of a Chrysler sale had added a new note of uncertainty for their own staffers and potential customers.