DaimlerChrysler AG plans to cut 6,000 administrative jobs, or 20 per cent of its worldwide total, in a bid to trim costs by $1.2 billion US a year.

Most of the cuts will be in Germany, among office workers in the accounting, auditing, personnel and strategic-planning departments.

Chief executive Dieter Zetsche said he wants to cut the number of management layers, eliminate duplication of effort and improve co-operation between the company's two main divisions, Mercedes and Chrysler.

DaimlerChrysler plans better co-ordination between departments.
DaimlerChrysler plans better co-ordination between departments.

He is also planning a cultural move that is designed to turn the emphasis back to engineering. He will move the head office from a luxury office tower in downtown Stuttgart to the suburban production plant where cars are made, a move that will remind managers why they are there.

"Our objective in taking these actions is to create a lean agile structure, with streamlined and stable processes that will unleash DaimlerChrysler's full potential," Zetsche said in a statement. "We're going to build on a strong product portfolio."

Company shares (NYSE:DCX) rose $2.13 on the New York Stock Exchange, to $54.37 US, after the announcement.

The DaimlerChrysler news came a day after Ford Motor Co. said it would cut 25,000 jobs and close 14 facilities by 2012. Ford had previously said it plans to eliminate 4,000 salaried positions by the end of March.

In Canada, the company will close an engine-casting plant in Windsor and one shift at its plant in St. Thomas, Ont. About 2,000 Canadian jobs will be affected.

In November, General Motors Corp. said it plans to slash 30,000 jobs and close 12 North American facilities.