DaimlerChrysler has announced it is to cut 13,000 jobs and close two factories in the US over the next three years.

In what was inevitably billed as a Valentine's Day massacre, Dieter Zetsche, the car group's chief executive, also indicated he is considering spinning off or selling Chrysler - a source of heavy losses since the disastrous merger seven years ago.

"We do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler," he said in a statement before a news conference in Auburn Hills, Michigan, yesterday.

The announcement sent the group's stock in the US up more than 5% to its highest level since June 2002, although profits fell by 40% in the fourth quarter.

The plan will see the closure of the company's assembly plant in Newark, Delaware, and reducing shifts at plants in Michigan and St Louis. Some 11,000 production workers will lose their jobs over the next three years, along with 2,000 salaried jobs by next year.

Daimler, which owns Mercedes, reduced its German workforce by 7,500 last year and has been under pressure to follow the lead of General Motors and Ford in slashing costs in its US operations. The cuts at Chrysler will mean that more than 100,000 workers will lose their jobs in the US car industry.

The job losses - which amount to 16% of the workforce - and other measures are designed to cut the cost of producing a car by $1,000 (£500) a vehicle.

Chrysler lost $1.7bn in the third quarter of last year when sales plunged 7%. Mr Zetsche ran the US business and managed to turn it around through savage cost-cutting but the recovery turned out to be short lived in the face of the Japanese sales onslaught and rising petrol prices.