BONN, Jan. 22 -- Daimler-Benz, Germany's autos-to-aircraft conglomerate, has decided to withdraw financial support for Fokker, its Dutch aircraft subsidiary, which has been recording massive losses, the company announced Monday. The move by Germany's biggest industrial company to close credit lines to Fokker could spell the end to one of Europe's oldest airplane manufacturers. Dutch Prime Minister Wim Kok called key ministers to a crisis meeting in a bid to avert the closure of Holland's only aircraft manufacturer. Stuttgart-based Daimler, which bought a majority stake in Fokker in 1993, expects to record 1995 losses of some 6 billion deutschmarks ($4 billion), the largest annual deficit in German corporate history. The losses derive mainly from Fokker and its electricals subsidiary AEG. Juergen Schrempp took over the chief executive's post from Eduard Reuter eight months ago, promising to put profitability first and reversing his predecessor's dash for growth by focusing on fewer profitable sectors. Reuter spent lavishly on buying up companies. His dream of turning Daimler Benz into a global, integrated technology company has cost the concern around 8 billion deutschmarks ($5.4 billion) since 1985, financial analysts calculate. Schrempp estimated potential Daimler liabilities in respect of Fokker at 2.3 billion deutschmarks ($1.5 billion) for 1995. Daimler manufactures Mercedes-Benz autos, which account for 70 percent of the company's annual 100 billion deutschmark ($65 billion) turnover and are the company's main source of profit. The company's Dasa aerospace subsidiary, like Fokker itself, has been operating heavily in the red largely as a result of intense international price competition and the strength of the deutschmark and the Dutch guilder against the U.S. dollar.
Daimler Benz has more than 300,000 employees worldwide whereas Fokker's Dutch manufacturing facilities employ 7,900 people. Anthony Fokker, a Dutchman, started building aircraft in Germany before World War l, but moved his factory by train to Holland after Germany's defeat. During the 1930s Fokker built nearly one third of all commercial aircraft used anywhere in the world. After its factories were destroyed in World War ll, the company achieved international success in the 1950's with its short-range Fokker Friendship propellor planes, but lost out to larger and lower-cost U.S. and European manufacturers before integrating itself two years ago with Daimler's Dasa. Despite the company's role as a 'visiting card' for Dutch technology, the government refused to pump in the 2.5 billion deutschmarks ($1.7 billion) demanded by Daimler as the price of keeping the company alive. Daimler and Fokker shares were suspended on German and Dutch stock exchanges Monday.
