Convertible boom for Audi A4, Crossfire and Mercedes CLK keeps Karmann busy but slower times seen for 2005

Osnabrueck. High demand for convertibles is helping Wilhelm Karmann GmbH have a record year, but the company's boss sees down times coming.

The company will build a combined 70,000 vehicles for Audi and DaimlerChrysler, up 26,000 units from last year, provisional figures show. Karmann's original target was 60,000 units this year.

Karmann President and CEO Bernd Lieberoth-Leden said at a press conference in Osnabrueck that demand for the Audi A4 convertible and the open version of the Mercedes-Benz CLK has been higher than expected. The company also has been producing more Chrysler Crossfire units, which is not a convertible, than originally planned.

Saturday shifts have been introduced at Karmann because the company is nearly at full production capacity.

Karmann builds 170 units of the Chrysler Crossfire a day - 70 more than the original plan.

Lieberoth-Leden said the daily production of both the Audi convertible (123) and the Mercedes-Benz CLK convertible (120) is also above original targets.

Starting next spring, the Stuttgart-based automaker will build the CLK convertible in Bremen, although this will not affect Karmann's production volume of 25,000 units a year.

Lieberoth-Leden expects a "slight" increase in revenue in 2004, due in part to the production start-up in spring of the Crossfire roadster. Karmann also will build the next-generation Mercedes SLK and it is negotiating new projects with Volkswagen and with an unnamed American carmaker.

Karmann won't be building a convertible for Hyundai. The CCS show car, which the Korean automaker introduced at the IAA in Frankfurt, will not go in series production. "Hyundai wants to build a convertible but has not decided yet on which platform," Lieberoth-Leden said.

In addition, he expects company sales to decrease significantly in 2005 and 2006 as demand drops.

"We work in a very cyclic business," Lieberoth-Leden.

Lieberoth-Leden plans to cut employment costs in the company's tools manufacturing sector at least 14 percent to make Karmann more competitive to bid for a 100 million euros contract with ThyssenKrupp to build the new Mercedes-Benz Sprinter.

He made the announcement prior to starting negotiations with the union on the revitalization of the sector to let union chairman Harald Klausing know it is impossible to hang on to all 750 jobs within that sector.

Karmann plans to reduce staff by having employees work 40-hour weeks instead of 35-hour weeks. The company also wants to scrap performance-based wages.

Klausing is working with an external management consultant on an alternative revitalization strategy. He warns that too much change to the tools sector would cause "irreparable damage" to Karmann.

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