No Door Drains. Rust ?
11-15-2013, 11:22 PM
#26
MBWorld Fanatic!
Sorry & 300C ~ E class platform etc. V6, V8 engines etc.
There was heavy bias in all US reporting of the subject as is the norm.
I have written at length about Jurgen on the board & the reality of the man that grew up with MBSA ~ search.
Exerpt from one post ~ quote:
"The only person that I will always defend is Jürgen Schrempp. I know him well from the days that he was firstly Technical Director of MBSA & later MD after a short spell in the US trying to fix the Euclid debacle. He is a fine and capable man that was hamstrung by government appointees to the German board. His proposed JV with FAW in China would have cemented Benz as the largest truck maker in the world for a very long time. Jurgen was visionary - his board was not. He also took unreasonable flack for the Daimler Chrysler mess & a company & shareholders that did not want to reform." unquote
There was heavy bias in all US reporting of the subject as is the norm.
I have written at length about Jurgen on the board & the reality of the man that grew up with MBSA ~ search.
Exerpt from one post ~ quote:
"The only person that I will always defend is Jürgen Schrempp. I know him well from the days that he was firstly Technical Director of MBSA & later MD after a short spell in the US trying to fix the Euclid debacle. He is a fine and capable man that was hamstrung by government appointees to the German board. His proposed JV with FAW in China would have cemented Benz as the largest truck maker in the world for a very long time. Jurgen was visionary - his board was not. He also took unreasonable flack for the Daimler Chrysler mess & a company & shareholders that did not want to reform." unquote
The C300/Charger platform is not the E Class platform and was not from MB, despite their claim. Some suspension design concept was shared....that's it....and those parts were actually design-released locally. Just which V8 are you suggesting? The classic Hemi? I think that pre-dated him by quite a spell. The only other corporate V8 was the 4.7, which was admittedly a far less heroic product, and also not from MB. There were no other V8s there, so I know not to what you refer. The recent Phoenix V6 program was wholly internal.
You are, of course, welcome to defend your friend, but those not affected by the perceptual filter of friendship have been all too keenly aware of what truly happened when he pillaged a company he once thought successful enough to want to own. Mandating ever-decontented and cheaper products to maximize the cash flow back home and installing bewildered German execs who had little understanding of how to market a volume vehicle in the US apparently did not achieve the results he anticipated. A "capable man" who suffered "unreasonable flack"? Really?
Next time you see Jurgen, you can share with him that he is still thought of on occasion, even as a successful company now has arisen from the mess he made, and then (thankfully, in retrospect) abandoned.
Here's a story from Automotive News, an international publication with editions for Europe and Asia, generally thought to rise above regional favoritism, and as solid journalists....and this is just one story. Other books exist.
BOOM & BUST: THE CHRYSLER STORY
Chrysler shriveled under Schrempp
1998 - 2007
Jesse Snyder
Bradford Wernle
Automotive News
February 16, 2009 - 12:01 am ET
From the first day of joint operation — a champagne-soaked, two-continent extravaganza — the pretense of DaimlerChrysler as a merger of equals was slipping.
In a dark-paneled boardroom at the New York Stock Exchange, DaimlerChrysler co-Chairman Juergen Schrempp — an intense, chain-smoking German — and his shorter, quieter American counterpart, Bob Eaton, met with a pair of reporters.
After ceremonies to observe DaimlerChrysler's stock listing in Frankfurt on Nov. 16, 1998, and New York the next morning, the men were jubilant but winding down. From the head of the table, Schrempp handled most questions. Beside him, a more subdued Eaton puffed a huge cigar and occasionally added a remark.
But when Eaton, who already had announced he would retire before the German, was asked whether he would leave early, Schrempp intercepted the question. Abruptly leaning forward and slamming both fists onto the tabletop, Schrempp growled, "I need him!" Eaton remained silent.
'Cash machine'
From the May 7 announcement that Germany's Daimler-Benz AG and Chrysler Corp. would combine, many financial analysts speculated that the deal was more Daimler takeover than merger.
Those in the top ranks of Chrysler had no doubt. "Daimler was interested because we were a cash machine," Francois Castaing, a former head of Chrysler engineering, told Automotive News.
In 1998 and 1999, Chrysler was churning out annual profits of $5 billion or so. Castaing had a lot to do with that. The French-born engineer became head of product engineering after Chrysler acquired American Motors from Renault in 1987.
Under then-President Bob Lutz, Castaing and others adapted AMC's innovative product development approach to create a "platform team" process at Chrysler.
The system forged a team attitude among the senior managers reporting to Lutz. But as Daimler dominated the merger and Eaton failed to defend American viewpoints, some veteran Chrysler managers despaired.
"When you have a real merger of equals, the co-chairmen work side by side in the same office," said Castaing, who left his job as an executive vice president in early 1998 but stayed on as an adviser to Eaton until 2000.
Castaing was dismayed to learn Schrempp would be based in Stuttgart and Eaton in Michigan. "I didn't want anything to do with something like that," Castaing said.
Casualties
Key executive departures from DaimlerChrysler
TITLE DATE REASON
Bob Lutz Vice chairman 1998 Retired
Dennis Pawley Exec. VP of manufacturing 1998 Resigned
Chris Theodore VP of engineering 1999 Resigned
Shamel Rushwin VP of manufacturing 1999 Resigned
Tom Stallkamp President 1999 Ousted
Bob Eaton co-Chairman 1999 Retired
Jim Holden President 2000 Ousted
Ted Cunningham VP of sales 2000 Ousted
Kathleen Oswald Chief admin. officer 2000 Ousted
Tony Cervone Communications chief 2000 Ousted
Tom Gale Exec. VP of design 2000 Retired
Francois Castaing Adviser to the chairman 2000 Retired
Inner circle dissolves
Chrysler's inner circle was dissolving. Lutz, then 67, retired in June 1998 while the new company was being formed.
Schrempp watched the senior Chrysler managers he admired slipping away. When Executive Vice President Dennis Pawley signaled he would leave by Day One, Schrempp turned on his considerable charm.
Pawley, a one-time General Motors plant foreman, had established a Japanese-style lean manufacturing system at Chrysler. One autumn evening, over fried fish and beer at a table with other senior executives at a fishing lodge near Stuttgart, Schrempp asked him why he wanted to leave.
"I want to fish," Pawley replied, in a conversation reported by Bill Vlasic and Bradley Stertz in their book, Taken for a Ride. Schrempp replied: "Nah, nah, you are important. We're going to have all kinds of fun running this company, and you're not going anywhere."
But Pawley did. At 57, he had had enough of factories and nonstop air travel. He wanted to spend more time with his wife. By Day One, Pawley had left Chrysler and was setting up a manufacturing consulting business.
The attrition in Auburn Hills continued. In the first quarter of 1999, engineering Vice President Chris Theodore and manufacturing Vice President Shamel Rushwin left to join Ford.
A wild party
As Chrysler's management team unraveled, Schrempp tried to rebuild German-American camaraderie at a February management retreat in Seville, Spain. On the opening evening amid the hotel's Old World grandeur, dozens of executives ate, drank and smoked fine cigars.
But for two Chrysler executives there, the indelible memory came as the evening wound down. Eaton had been quiet and subdued all evening while an animated Schrempp regaled the group.
As usual, Schrempp's wife was not in attendance. But his longtime secretary, Lydia Deininger, was right beside him. Abruptly, Schrempp picked up the petite Deininger, slung her over his shoulder, said farewell to a startled cluster of executives and carried his secretary up the stairs.
"Eaton was out of it," said one executive who had refused a job offer from another automaker. "At that moment, I decided to leave. I came home and made the call."
Eaton had picked Tom Stallkamp to replace Lutz as Chrysler president in late 1997. But weeks before retiring in late 1999, Eaton fired Stallkamp, appointing Chrysler sales boss Jim Holden as the new president.
Less than a year later, as Chrysler sales continued falling, Schrempp abruptly sacked Holden. Days after being fired, Holden told Peter Brown, then the editor and now the editorial director of Automotive News, that Schrempp blamed him for lower sales.
So Holden followed Lutz, Pawley, Theodore, Rushwin, Stallkamp and Eaton out the door.
In May of 2000, Executive Vice President Tom Gale, Chrysler's highly regarded design chief, announced he would retire by year end and open a design consulting firm.
Two years after Daimler's takeover, the group that created Chrysler's platform teams and six years of prosperity had quit, retired or been fired.
Slashing costs
But the bloodletting at Chrysler wasn't over. In November 2000, Schrempp appointed Dieter Zetsche, an engineer then running Mercedes' commercial-vehicle division, to replace Holden. By then, the U.S. operation was no longer a cash cow.
Chrysler had failed to cut production to match falling sales. Finally, the company closed most plants and boosted incentives on unsold inventories. By the fourth quarter of 2000, the heady profits of 1998 and 1999 had degenerated into a $1.2 billion loss.
Zetsche cleaned house. Sales chief Ted Cunningham, chief administrative officer Kathleen Oswald and communications head Tony Cervone all departed. Zetsche ordered his COO, Wolfgang Bernhard, to slash costs.
"Daimler did rip out a lot of cost" after Zetsche took over Chrysler, said a former senior engineer. Before Zetsche, platform managers had allowed model-by-model variations to proliferate. Costs rose as Chrysler's lineup of cars and trucks shared fewer parts, the source said.
"Chrysler's platform teams realized they had gone too far on individualizing products and were [scaling] back," he said. "But under Dieter, we repeated history. We ripped out stuff that people noticed and went back to making cheap interiors and noisy cars."
Colleagues remember a Jeep platform team manager's embarrassment. Told to cut manufacturing costs on an existing model, he removed a low-washer-fluid warning light.
His daughter bought one of the de-contented Jeeps. One wet-but-sunny winter morning, she called from her car: "Dad, I'm out of washer fluid and I can't see. What happened to the warning light?"
'Hollowed out'
Chrysler's losses damaged Schrempp's status with his own board and emboldened skeptical shareholders who had opposed the Chrysler deal. German financial circles believed Chrysler was a loser that was draining Mercedes' resources.
When Schrempp was forced to step down in 2005, Chrysler lost much of its access to outside expertise for car development. As German investors increased demands to shed Chrysler, U.S. product programs lost focus.
By the time Cerberus Capital Management LP acquired the majority of Chrysler in 2007, industry critics rated most Chrysler cars below average.
Sixteen months later, Chrylser CEO Bob Nardelli admitted as much in a Dec. 9 U.S. Senate hearing. When Sen. Bob Corker, R-Tenn., suggested Chrysler had few competitive vehicles under development, Nardelli agreed.
Under Daimler, Nardelli said, Chrysler had been "somewhat hollowed out."
You can reach Jesse Snyder at jsnyder@crain.com.
Read more: http://www.autonews.com/article/2009...#ixzz2kmKvEizm
Follow us: @Automotive_News on Twitter | AutoNews on Facebook
Despite all this, fear not, Glynn, for I do not judge you by the company you keep, and my respect for your stature is undiminished!
11-15-2013, 11:26 PM
#27
MBWorld Fanatic!
11-15-2013, 11:28 PM
#28
Super Moderator
JC ~ have you pulled back the rubbers to check. The W204's in our family are long gone so I can't go to the garage & check. I have never seen a Benz without door drains. Had breakfast with Benz today & drove the new S Class. S500 & the S400 Hybrid. What a wonderful car. Loved the experience although the sensation of seat bolsters pumping up as you corner is a little strange initially. The suspension with active road scanning to predict bumps, potholes, speed bumps etc is phenomenal as are the multiple active LED headlights. The new class leader again!
11-15-2013, 11:35 PM
#29
MBWorld Fanatic!
Glynn, Come to think of it, we should charge admission to this thread! This is some of the most interesting dialogue around here, if I do say so myself! We should jointly host a radio talk show! "Point/Counterpart" style! 
11-16-2013, 12:05 AM
#31
MBWorld Fanatic!
As a skeptic, I don't believe everything big corporations tell us (especially the crooks in upper management in the automotive industry). There is way too much that goes on behind closed doors that goes far beyond our knowledge.
11-16-2013, 12:15 AM
#32
Super Moderator
Glynn, if this is of interest, we can continue the dialogue for the interest of the forum, but I think we are both fairly set in our relative perspectives. One man's facts is another's bias, it seems.
The C300/Charger platform is not the E Class platform and was not from MB, despite their claim. Some suspension design concept was shared....that's it....and those parts were actually design-released locally. Just which V8 are you suggesting? The classic Hemi? I think that pre-dated him by quite a spell. The only other corporate V8 was the 4.7, which was admittedly a far less heroic product, and also not from MB. There were no other V8s there, so I know not to what you refer. The recent Phoenix V6 program was wholly internal.
You are, of course, welcome to defend your friend, but those not affected by the perceptual filter of friendship have been all too keenly aware of what truly happened when he pillaged a company he once thought successful enough to want to own. Mandating ever-decontented and cheaper products to maximize the cash flow back home and installing bewildered German execs who had little understanding of how to market a volume vehicle in the US apparently did not achieve the results he anticipated. A "capable man" who suffered "unreasonable flack"? Really?
Next time you see Jurgen, you can share with him that he is still thought of on occasion, even as a successful company now has arisen from the mess he made, and then (thankfully, in retrospect) abandoned.
Here's a story from Automotive News, an international publication with editions for Europe and Asia, generally thought to rise above regional favoritism, and as solid journalists....and this is just one story. Other books exist.
BOOM & BUST: THE CHRYSLER STORY
Chrysler shriveled under Schrempp
1998 - 2007
Jesse Snyder
Bradford Wernle
Automotive News
February 16, 2009 - 12:01 am ET
From the first day of joint operation — a champagne-soaked, two-continent extravaganza — the pretense of DaimlerChrysler as a merger of equals was slipping.
In a dark-paneled boardroom at the New York Stock Exchange, DaimlerChrysler co-Chairman Juergen Schrempp — an intense, chain-smoking German — and his shorter, quieter American counterpart, Bob Eaton, met with a pair of reporters.
After ceremonies to observe DaimlerChrysler's stock listing in Frankfurt on Nov. 16, 1998, and New York the next morning, the men were jubilant but winding down. From the head of the table, Schrempp handled most questions. Beside him, a more subdued Eaton puffed a huge cigar and occasionally added a remark.
But when Eaton, who already had announced he would retire before the German, was asked whether he would leave early, Schrempp intercepted the question. Abruptly leaning forward and slamming both fists onto the tabletop, Schrempp growled, "I need him!" Eaton remained silent.
'Cash machine'
From the May 7 announcement that Germany's Daimler-Benz AG and Chrysler Corp. would combine, many financial analysts speculated that the deal was more Daimler takeover than merger.
Those in the top ranks of Chrysler had no doubt. "Daimler was interested because we were a cash machine," Francois Castaing, a former head of Chrysler engineering, told Automotive News.
In 1998 and 1999, Chrysler was churning out annual profits of $5 billion or so. Castaing had a lot to do with that. The French-born engineer became head of product engineering after Chrysler acquired American Motors from Renault in 1987.
Under then-President Bob Lutz, Castaing and others adapted AMC's innovative product development approach to create a "platform team" process at Chrysler.
The system forged a team attitude among the senior managers reporting to Lutz. But as Daimler dominated the merger and Eaton failed to defend American viewpoints, some veteran Chrysler managers despaired.
"When you have a real merger of equals, the co-chairmen work side by side in the same office," said Castaing, who left his job as an executive vice president in early 1998 but stayed on as an adviser to Eaton until 2000.
Castaing was dismayed to learn Schrempp would be based in Stuttgart and Eaton in Michigan. "I didn't want anything to do with something like that," Castaing said.
Casualties
Key executive departures from DaimlerChrysler
TITLE DATE REASON
Bob Lutz Vice chairman 1998 Retired
Dennis Pawley Exec. VP of manufacturing 1998 Resigned
Chris Theodore VP of engineering 1999 Resigned
Shamel Rushwin VP of manufacturing 1999 Resigned
Tom Stallkamp President 1999 Ousted
Bob Eaton co-Chairman 1999 Retired
Jim Holden President 2000 Ousted
Ted Cunningham VP of sales 2000 Ousted
Kathleen Oswald Chief admin. officer 2000 Ousted
Tony Cervone Communications chief 2000 Ousted
Tom Gale Exec. VP of design 2000 Retired
Francois Castaing Adviser to the chairman 2000 Retired
Inner circle dissolves
Chrysler's inner circle was dissolving. Lutz, then 67, retired in June 1998 while the new company was being formed.
Schrempp watched the senior Chrysler managers he admired slipping away. When Executive Vice President Dennis Pawley signaled he would leave by Day One, Schrempp turned on his considerable charm.
Pawley, a one-time General Motors plant foreman, had established a Japanese-style lean manufacturing system at Chrysler. One autumn evening, over fried fish and beer at a table with other senior executives at a fishing lodge near Stuttgart, Schrempp asked him why he wanted to leave.
"I want to fish," Pawley replied, in a conversation reported by Bill Vlasic and Bradley Stertz in their book, Taken for a Ride. Schrempp replied: "Nah, nah, you are important. We're going to have all kinds of fun running this company, and you're not going anywhere."
But Pawley did. At 57, he had had enough of factories and nonstop air travel. He wanted to spend more time with his wife. By Day One, Pawley had left Chrysler and was setting up a manufacturing consulting business.
The attrition in Auburn Hills continued. In the first quarter of 1999, engineering Vice President Chris Theodore and manufacturing Vice President Shamel Rushwin left to join Ford.
A wild party
As Chrysler's management team unraveled, Schrempp tried to rebuild German-American camaraderie at a February management retreat in Seville, Spain. On the opening evening amid the hotel's Old World grandeur, dozens of executives ate, drank and smoked fine cigars.
But for two Chrysler executives there, the indelible memory came as the evening wound down. Eaton had been quiet and subdued all evening while an animated Schrempp regaled the group.
As usual, Schrempp's wife was not in attendance. But his longtime secretary, Lydia Deininger, was right beside him. Abruptly, Schrempp picked up the petite Deininger, slung her over his shoulder, said farewell to a startled cluster of executives and carried his secretary up the stairs.
"Eaton was out of it," said one executive who had refused a job offer from another automaker. "At that moment, I decided to leave. I came home and made the call."
Eaton had picked Tom Stallkamp to replace Lutz as Chrysler president in late 1997. But weeks before retiring in late 1999, Eaton fired Stallkamp, appointing Chrysler sales boss Jim Holden as the new president.
Less than a year later, as Chrysler sales continued falling, Schrempp abruptly sacked Holden. Days after being fired, Holden told Peter Brown, then the editor and now the editorial director of Automotive News, that Schrempp blamed him for lower sales.
So Holden followed Lutz, Pawley, Theodore, Rushwin, Stallkamp and Eaton out the door.
In May of 2000, Executive Vice President Tom Gale, Chrysler's highly regarded design chief, announced he would retire by year end and open a design consulting firm.
Two years after Daimler's takeover, the group that created Chrysler's platform teams and six years of prosperity had quit, retired or been fired.
Slashing costs
But the bloodletting at Chrysler wasn't over. In November 2000, Schrempp appointed Dieter Zetsche, an engineer then running Mercedes' commercial-vehicle division, to replace Holden. By then, the U.S. operation was no longer a cash cow.
Chrysler had failed to cut production to match falling sales. Finally, the company closed most plants and boosted incentives on unsold inventories. By the fourth quarter of 2000, the heady profits of 1998 and 1999 had degenerated into a $1.2 billion loss.
Zetsche cleaned house. Sales chief Ted Cunningham, chief administrative officer Kathleen Oswald and communications head Tony Cervone all departed. Zetsche ordered his COO, Wolfgang Bernhard, to slash costs.
"Daimler did rip out a lot of cost" after Zetsche took over Chrysler, said a former senior engineer. Before Zetsche, platform managers had allowed model-by-model variations to proliferate. Costs rose as Chrysler's lineup of cars and trucks shared fewer parts, the source said.
"Chrysler's platform teams realized they had gone too far on individualizing products and were [scaling] back," he said. "But under Dieter, we repeated history. We ripped out stuff that people noticed and went back to making cheap interiors and noisy cars."
Colleagues remember a Jeep platform team manager's embarrassment. Told to cut manufacturing costs on an existing model, he removed a low-washer-fluid warning light.
His daughter bought one of the de-contented Jeeps. One wet-but-sunny winter morning, she called from her car: "Dad, I'm out of washer fluid and I can't see. What happened to the warning light?"
'Hollowed out'
Chrysler's losses damaged Schrempp's status with his own board and emboldened skeptical shareholders who had opposed the Chrysler deal. German financial circles believed Chrysler was a loser that was draining Mercedes' resources.
When Schrempp was forced to step down in 2005, Chrysler lost much of its access to outside expertise for car development. As German investors increased demands to shed Chrysler, U.S. product programs lost focus.
By the time Cerberus Capital Management LP acquired the majority of Chrysler in 2007, industry critics rated most Chrysler cars below average.
Sixteen months later, Chrylser CEO Bob Nardelli admitted as much in a Dec. 9 U.S. Senate hearing. When Sen. Bob Corker, R-Tenn., suggested Chrysler had few competitive vehicles under development, Nardelli agreed.
Under Daimler, Nardelli said, Chrysler had been "somewhat hollowed out."
You can reach Jesse Snyder at jsnyder@crain.com.
Read more: http://www.autonews.com/article/2009...#ixzz2kmKvEizm
Follow us: @Automotive_News on Twitter | AutoNews on Facebook
Despite all this, fear not, Glynn, for I do not judge you by the company you keep, and my respect for your stature is undiminished!
The C300/Charger platform is not the E Class platform and was not from MB, despite their claim. Some suspension design concept was shared....that's it....and those parts were actually design-released locally. Just which V8 are you suggesting? The classic Hemi? I think that pre-dated him by quite a spell. The only other corporate V8 was the 4.7, which was admittedly a far less heroic product, and also not from MB. There were no other V8s there, so I know not to what you refer. The recent Phoenix V6 program was wholly internal.
You are, of course, welcome to defend your friend, but those not affected by the perceptual filter of friendship have been all too keenly aware of what truly happened when he pillaged a company he once thought successful enough to want to own. Mandating ever-decontented and cheaper products to maximize the cash flow back home and installing bewildered German execs who had little understanding of how to market a volume vehicle in the US apparently did not achieve the results he anticipated. A "capable man" who suffered "unreasonable flack"? Really?
Next time you see Jurgen, you can share with him that he is still thought of on occasion, even as a successful company now has arisen from the mess he made, and then (thankfully, in retrospect) abandoned.
Here's a story from Automotive News, an international publication with editions for Europe and Asia, generally thought to rise above regional favoritism, and as solid journalists....and this is just one story. Other books exist.
BOOM & BUST: THE CHRYSLER STORY
Chrysler shriveled under Schrempp
1998 - 2007
Jesse Snyder
Bradford Wernle
Automotive News
February 16, 2009 - 12:01 am ET
From the first day of joint operation — a champagne-soaked, two-continent extravaganza — the pretense of DaimlerChrysler as a merger of equals was slipping.
In a dark-paneled boardroom at the New York Stock Exchange, DaimlerChrysler co-Chairman Juergen Schrempp — an intense, chain-smoking German — and his shorter, quieter American counterpart, Bob Eaton, met with a pair of reporters.
After ceremonies to observe DaimlerChrysler's stock listing in Frankfurt on Nov. 16, 1998, and New York the next morning, the men were jubilant but winding down. From the head of the table, Schrempp handled most questions. Beside him, a more subdued Eaton puffed a huge cigar and occasionally added a remark.
But when Eaton, who already had announced he would retire before the German, was asked whether he would leave early, Schrempp intercepted the question. Abruptly leaning forward and slamming both fists onto the tabletop, Schrempp growled, "I need him!" Eaton remained silent.
'Cash machine'
From the May 7 announcement that Germany's Daimler-Benz AG and Chrysler Corp. would combine, many financial analysts speculated that the deal was more Daimler takeover than merger.
Those in the top ranks of Chrysler had no doubt. "Daimler was interested because we were a cash machine," Francois Castaing, a former head of Chrysler engineering, told Automotive News.
In 1998 and 1999, Chrysler was churning out annual profits of $5 billion or so. Castaing had a lot to do with that. The French-born engineer became head of product engineering after Chrysler acquired American Motors from Renault in 1987.
Under then-President Bob Lutz, Castaing and others adapted AMC's innovative product development approach to create a "platform team" process at Chrysler.
The system forged a team attitude among the senior managers reporting to Lutz. But as Daimler dominated the merger and Eaton failed to defend American viewpoints, some veteran Chrysler managers despaired.
"When you have a real merger of equals, the co-chairmen work side by side in the same office," said Castaing, who left his job as an executive vice president in early 1998 but stayed on as an adviser to Eaton until 2000.
Castaing was dismayed to learn Schrempp would be based in Stuttgart and Eaton in Michigan. "I didn't want anything to do with something like that," Castaing said.
Casualties
Key executive departures from DaimlerChrysler
TITLE DATE REASON
Bob Lutz Vice chairman 1998 Retired
Dennis Pawley Exec. VP of manufacturing 1998 Resigned
Chris Theodore VP of engineering 1999 Resigned
Shamel Rushwin VP of manufacturing 1999 Resigned
Tom Stallkamp President 1999 Ousted
Bob Eaton co-Chairman 1999 Retired
Jim Holden President 2000 Ousted
Ted Cunningham VP of sales 2000 Ousted
Kathleen Oswald Chief admin. officer 2000 Ousted
Tony Cervone Communications chief 2000 Ousted
Tom Gale Exec. VP of design 2000 Retired
Francois Castaing Adviser to the chairman 2000 Retired
Inner circle dissolves
Chrysler's inner circle was dissolving. Lutz, then 67, retired in June 1998 while the new company was being formed.
Schrempp watched the senior Chrysler managers he admired slipping away. When Executive Vice President Dennis Pawley signaled he would leave by Day One, Schrempp turned on his considerable charm.
Pawley, a one-time General Motors plant foreman, had established a Japanese-style lean manufacturing system at Chrysler. One autumn evening, over fried fish and beer at a table with other senior executives at a fishing lodge near Stuttgart, Schrempp asked him why he wanted to leave.
"I want to fish," Pawley replied, in a conversation reported by Bill Vlasic and Bradley Stertz in their book, Taken for a Ride. Schrempp replied: "Nah, nah, you are important. We're going to have all kinds of fun running this company, and you're not going anywhere."
But Pawley did. At 57, he had had enough of factories and nonstop air travel. He wanted to spend more time with his wife. By Day One, Pawley had left Chrysler and was setting up a manufacturing consulting business.
The attrition in Auburn Hills continued. In the first quarter of 1999, engineering Vice President Chris Theodore and manufacturing Vice President Shamel Rushwin left to join Ford.
A wild party
As Chrysler's management team unraveled, Schrempp tried to rebuild German-American camaraderie at a February management retreat in Seville, Spain. On the opening evening amid the hotel's Old World grandeur, dozens of executives ate, drank and smoked fine cigars.
But for two Chrysler executives there, the indelible memory came as the evening wound down. Eaton had been quiet and subdued all evening while an animated Schrempp regaled the group.
As usual, Schrempp's wife was not in attendance. But his longtime secretary, Lydia Deininger, was right beside him. Abruptly, Schrempp picked up the petite Deininger, slung her over his shoulder, said farewell to a startled cluster of executives and carried his secretary up the stairs.
"Eaton was out of it," said one executive who had refused a job offer from another automaker. "At that moment, I decided to leave. I came home and made the call."
Eaton had picked Tom Stallkamp to replace Lutz as Chrysler president in late 1997. But weeks before retiring in late 1999, Eaton fired Stallkamp, appointing Chrysler sales boss Jim Holden as the new president.
Less than a year later, as Chrysler sales continued falling, Schrempp abruptly sacked Holden. Days after being fired, Holden told Peter Brown, then the editor and now the editorial director of Automotive News, that Schrempp blamed him for lower sales.
So Holden followed Lutz, Pawley, Theodore, Rushwin, Stallkamp and Eaton out the door.
In May of 2000, Executive Vice President Tom Gale, Chrysler's highly regarded design chief, announced he would retire by year end and open a design consulting firm.
Two years after Daimler's takeover, the group that created Chrysler's platform teams and six years of prosperity had quit, retired or been fired.
Slashing costs
But the bloodletting at Chrysler wasn't over. In November 2000, Schrempp appointed Dieter Zetsche, an engineer then running Mercedes' commercial-vehicle division, to replace Holden. By then, the U.S. operation was no longer a cash cow.
Chrysler had failed to cut production to match falling sales. Finally, the company closed most plants and boosted incentives on unsold inventories. By the fourth quarter of 2000, the heady profits of 1998 and 1999 had degenerated into a $1.2 billion loss.
Zetsche cleaned house. Sales chief Ted Cunningham, chief administrative officer Kathleen Oswald and communications head Tony Cervone all departed. Zetsche ordered his COO, Wolfgang Bernhard, to slash costs.
"Daimler did rip out a lot of cost" after Zetsche took over Chrysler, said a former senior engineer. Before Zetsche, platform managers had allowed model-by-model variations to proliferate. Costs rose as Chrysler's lineup of cars and trucks shared fewer parts, the source said.
"Chrysler's platform teams realized they had gone too far on individualizing products and were [scaling] back," he said. "But under Dieter, we repeated history. We ripped out stuff that people noticed and went back to making cheap interiors and noisy cars."
Colleagues remember a Jeep platform team manager's embarrassment. Told to cut manufacturing costs on an existing model, he removed a low-washer-fluid warning light.
His daughter bought one of the de-contented Jeeps. One wet-but-sunny winter morning, she called from her car: "Dad, I'm out of washer fluid and I can't see. What happened to the warning light?"
'Hollowed out'
Chrysler's losses damaged Schrempp's status with his own board and emboldened skeptical shareholders who had opposed the Chrysler deal. German financial circles believed Chrysler was a loser that was draining Mercedes' resources.
When Schrempp was forced to step down in 2005, Chrysler lost much of its access to outside expertise for car development. As German investors increased demands to shed Chrysler, U.S. product programs lost focus.
By the time Cerberus Capital Management LP acquired the majority of Chrysler in 2007, industry critics rated most Chrysler cars below average.
Sixteen months later, Chrylser CEO Bob Nardelli admitted as much in a Dec. 9 U.S. Senate hearing. When Sen. Bob Corker, R-Tenn., suggested Chrysler had few competitive vehicles under development, Nardelli agreed.
Under Daimler, Nardelli said, Chrysler had been "somewhat hollowed out."
You can reach Jesse Snyder at jsnyder@crain.com.
Read more: http://www.autonews.com/article/2009...#ixzz2kmKvEizm
Follow us: @Automotive_News on Twitter | AutoNews on Facebook
Despite all this, fear not, Glynn, for I do not judge you by the company you keep, and my respect for your stature is undiminished!
I have read all the articles ad nauseum as have many. The ROW take was different although there was flack in Germany as to the Chrysler drain on Daimler resources. My attitude is that I have heard it from the horses mouth & that is good enough for me. Yes I admire Jurgen ~ I always have. It is evident that we will never agree on the Daimler Chrysler issue. German & South African authors will support my point of view & US scribes yours. Funnily enough the Japanese think Schrempp is a God & his status is not far behind that in China.
He can be a divisive & abrasive man but that is all part of the character. I like the company I keep.
SA built W204's have been great & you can thank Schrempp for that. He has always been very proud of the East London plant & has never been shy to spend money there to improve quality.
If there was a problem in the Daimler takeover of Chrysler it was a clash of cultures. Benz could not stand the sloppiness they found & the reluctance to change.
Anyway, we are happy to have Schrempp still involved with the highly profitable MBSA & Sasol where he is also a board member. He fits well into our robust no nonsense culture. My Sasol shares are worth a fortune thanks to people like him.
Last edited by Glyn M Ruck; 11-16-2013 at 02:43 AM.
11-16-2013, 12:39 AM
#33
MBWorld Fanatic!
I'm talking about the Pentastar V6 (or Phoenix as originally called). Whether you like it or not there is a lot of Benz M276 in it. A V8 was intended ~ I don't know whether that ever happened. I have even seen Pentastar V6's running on test in Germany. Yes it's an all American built engine today. Much of it is a cheapened M276.
I have read all the articles ad nauseum as have many. The ROW take was different although there was flack in Germany as to the Chrysler drain on Daimler resources. My attitude is that I have heard it from the horses mouth & that is good enough for me. Yes I admire Jurgen ~ I always have. It is evident that we will never agree on the Daimler Chrysler. German & South African authors will support my point of view & US scribes yours. Funnily enough the Japanese think Schrempp is a God & his status is not far behind that in China.
He can be a divisive & abrasive man but that is all part of the character. I like the company I keep.
SA built W204's have been great & you can thank Schrempp for that. He has always been very proud of the East London plant & has never been shy to spend money there to improve quality.
If there was a problem in the Daimler takeover of Chrysler it was a clash of cultures. Benz could not stand the sloppiness they found & the reluctance to change.
Anyway, we are happy to have Schrempp still involved with the highly profitable MBSA & Sasol where he is also a board member. He fits well into our robust no nonsense culture.
I have read all the articles ad nauseum as have many. The ROW take was different although there was flack in Germany as to the Chrysler drain on Daimler resources. My attitude is that I have heard it from the horses mouth & that is good enough for me. Yes I admire Jurgen ~ I always have. It is evident that we will never agree on the Daimler Chrysler. German & South African authors will support my point of view & US scribes yours. Funnily enough the Japanese think Schrempp is a God & his status is not far behind that in China.
He can be a divisive & abrasive man but that is all part of the character. I like the company I keep.
SA built W204's have been great & you can thank Schrempp for that. He has always been very proud of the East London plant & has never been shy to spend money there to improve quality.
If there was a problem in the Daimler takeover of Chrysler it was a clash of cultures. Benz could not stand the sloppiness they found & the reluctance to change.
Anyway, we are happy to have Schrempp still involved with the highly profitable MBSA & Sasol where he is also a board member. He fits well into our robust no nonsense culture.
The "flack" on the Chrysler drain only came after Jurgen started to choke the life out of the company. How could there be a drain if the company was so attractive and cash-rich that he thought it was worth buying? He bought it and "managed it" into the ground. That's when the so-called, self-inflicted drain started. It's like killing your parents and then complaining that you're an orphan! The reality is that German snobbery was offended by being associated with a volume American brand and Jurgen missed the intensity of that cultural norm back home before he made the deal.
Of course Jurgen is well-regarded in several areas. His skills are well developed for improving that which he wishes to improve. That wasn't the problem. He never wished to improve Chrysler...only to be a parasite which could feed off it. He simply misjudged how far downmarket he could push Chrysler products and still find profitable market acceptance, and had little concern for the impact on the company if cash was flowing. His actions and mandates which he enforced on Drs. Z and Bernhardt spoke for themselves. To date, he has taken no actions against Japan and China...just wait until he tries to buy or have an "equal merger" with any of their companies....there won't be enough PR in the entire East to mitigate that outcome. "Sloppiness" is quite ironic. MB sent manufacturing teams to learn how Chrysler produced pre-launch prototypes which looked as good as their production.
Many here would also be happy with Jurgen's current assignment and hope it keeps him quite occupied! Perhaps on that we both agree!
Last edited by Sportstick; 11-16-2013 at 12:41 AM.
11-16-2013, 12:49 AM
#34
Super Moderator
This is probably a fair post Daimler Chrysler evaluation of the failed merger that we could both live with. The preamble that I've edited out for size considerations purely covers the respective size of the 2 before merger & all the Kerkorian nonesense plus all the reference material used in the study. This all reduced to layman's language & some translated from German.
3. WHAT THE MERGER WAS SUPPOSED TO DO
The merger between Daimler Chrysler was supposed to create a vast automobile manufacturing company that would create a virtual monopoly in all market segments. The market cap was supposed to be more than 130 billion USD. Daimler had a very good presence in the premium and luxury car market while Chrysler had a good hold in the middle level car market segment. While Chrysler had managed to salvage it operation from bankruptcy on more than a few occasions, it was financially vulnerable. Daimler on the other hand had a sound business model and had enjoyed stable growth. Both these companies were expected to use their knowledge in a proactive and cooperative way to increase their business. (Surowiecki James, 15 May 1998).
The merger was also supposed to produce huge savings in the form of reduced development cost, sharing of resources and reduction in procurement and outsourcing costs. US Suppliers to Chrysler were looking forward to sales in the European market while the German suppliers looked for similar opportunities in US, South America and Canada. The market was supposed to include OEM sales as well as the spare parts market. As the editorial board of WSES put it "If Daimler Chrysler were a country, it would rank 37th in the world in terms of Gross Domestic Product, just behind Austria, but well ahead of six other members of the European Union--Greece, Portugal, Norway, Denmark, Finland and Ireland" (WSWS, 8 May 1998).
4. WHAT WENT WRONG
A number of reasons have been attributed to the failed merger and these centered around certain cultural perceptions, work methods, technology and other issues. These are discussed in this section
4.1. Clash of Cultures
Though Schrempp had announced that this was a merger of equals, this was actually not the case. Daimler has paid 37 billion USD in a stock swap exchange and it wanted good value for its money. When the merger was to be signed, the Americans had the impression that the Germans were simpletons, hard working but brilliant who had a low profile and kept to themselves. The Germans on the other hand had imagined a 'Cowboy' image of the Americans and were expecting a gung ho team. But the reality was very different as the German leader, Jürgen Schrempp, had a different background. It is reported that in one of the first meetings held on 11 December 1998 in Spain called the 'Top Management Meeting', the Germans outnumbered the Americans by two to one. It was clear that Schrempp was in charge as he rushed about, talking from the podium and shouting around. When the time came for drinks, everybody joined in the fun and it was Schrempp who sang the loudest and probably drank the most. The Americans were expecting a sober German, but they were facing someone who seemed to be more fun than their serious CEO, Eaton and it was clear who was in charge. This incident created a new paradigm shift in the relations and it was understood that the Germans with their money and superior cars would be in a dominant position. They looked down at the Americans as rather poor cousins who made small and inexpensive cars for the middle class (Vlasic et all, 5 June 2000).
4.2. Disparities in Wages
There were wide disparities in wages between the US and the German workers. It was felt the US workers were being (paid) a larger amount when compared to the amount the Germans were getting much lesser. According to Orr (Orr Deborah, 17 May 1999), Eaton, the head of Chrysler was getting about 11.7 million USD while his counter part, Schrempp was being paid about 2 million USD. The company had filed a declaration with the Securities and Exchange Commission and had declared that only 17 managers and board members were paid a total sum of 40.4 million USD. The big question that was being asked was if the US workers would have to take a pay cut or would the Germans be given a massive pay hike. The US workers would not agree to any pay cuts while the increasing the wages all around for a 440,000 workforce would mean certain financial ruin. Certain changes were made and bonus paid to the Daimler staff and the options given to the Chrysler staff disappeared when the merger came into effect. This issue continued to cause severe strain in the interactions between the US and German employees, but incidentally before the issue became very serious, the merger itself was doomed.
4.3. Different Business Models
There was an apparent clash of business models and ethics for the stakeholders. The Germans catered to the high and premium market segment and consequently followed the high cost, low volume-manufacturing model. The value proposition it offered to its customers was brand identity and exclusiveness. Chrysler on the other hand had to skim off each cent it could save and provide low cost models to a price sensitive and fuel economy minded customers. It had adopted a low cost, high volume-manufacturing model that relied on mass production techniques. Mixing and integrating these two models unfortunately did not pay off and was not handled well (Sandoz, June 2002).
4.4.Adverse Media Reporting
The media, which had initially applauded the merger, started damming the merger and everyone from lay journalists to authors had a field day in bashing the merger. This created a very bad publicity and may have hastened the failure of the merger. An excerpt from the book by Vlasic says
"But the union didn't turn out to be a merger made in heaven. When the dust settled, Daimler was firmly in control of Chrysler, and the shock waves were reverberating on both sides of the Atlantic. An American icon would lose its independence, and a German giant would grow in power and influence. Daimler chief Jurgen E. Schrempp grabbed the wheel of DaimlerChrysler. His co-chairman from Chrysler, Robert J. Eaton, took a back seat. And Thomas T. Stallkamp, Chrysler's president, got caught in between." (Vlasic et all, 5 June 2000)
Such writings were published day in and day out and caused much anger and distrust among the Americans who believed that they had been 'conned' and 'taken for a ride' by the wily Germans
4.5.Technology Issues
Chrysler had certain technologies that could have helped the German company. Chrysler had always used the front wheel drive transmission that got power from the New Venture gearbox that had been developed along with General motors. This was supposed to help the Daimler cars, which were always rear drive vehicles. Mercedes on the other hand had the famous 5 speed automatic transmission that are standard features in its cars while this technology was not used at all by Chrysler. While Chrysler always led in the 2 (??? nonesense) stroke petrol engine that has been termed as more powerful but 'gas guzzling', Germans had advance in the field of 4 stroke direct injection diesel engines. If the Mercedes engine could be adapted to the Chrysler vehicles and vice versa, then a very competitive model could have been developed for Chrysler in the 4 cylinders to 12 cylinder automobiles. Daimler cars were renowned for certain safety measures that were built into the cars and these included features such as anti lock braking systems, smart baby seats, ultrasonic obstacle detectors, seat belt pre-tensioners, safety air bags and others. Chrysler did not implement these systems in their cars since they felt there was no need for these innovations, cost of the car would go up and finds lesser takers. Chrysler had used aluminium and impact resistance composite materials in the body panel construction. This could have been used by Daimler to improve the fuel economy of their cars since the German company had always used gage steel sheets for the body panel work. Both the companies had developed prototypes of hybrid vehicles that could run on alternative fuels such as electricity, bio diesel, fuel cells, hydrogen based fuel cells and so on. But common projects were never taken up to develop these vehicles. Unfortunately deep distrust and 'we are better' attitude acted as sound barriers for knowledge sharing. The benefits in engineering knowledge remained isolated in their respective companies (Herman Don, June 1998).
4.6. Cost Cutting Measures
With reducing sales and increasing overheads, there was an urgent need to control costs. The management decided to cut about 13,000 jobs and close a number of plants and factories. This was deemed necessary since sales were down and there was excess capacity, so closing down idle plants was the immediate solution to control costs. This has created a lot if unrest in the workforce and the labour unions (Hawranek Dietmar, 19 February 2007).
4.7. Market Segments Issues
Chrysler had an upper hand in the gas-guzzling card such as the SUVs and the minivan. While these vehicles were popular in the early 1990s, the market demand for these cars fell in the early 2000's. While there was a demand for fuel efficient, compact cars, Chrysler did not have any good car model to meet this demand. Consequently, Chrysler lost about 1.5 billion USD in 2006. There have been increasing demands from major shareholders such as the Deutsche Bank to sell off the ailing unit (Heading For Divorce, 4 April 2004).
4.8. Where the merger stands now
Daimler had reportedly spent 36billion USD to acquire Chrysler. With steeply falling sales, Chrysler is worth only about 14 billion dollars and it has a pension and health liability of 12 billion USD. This leaves a very small operating margin. Daimler has announced that it wants to sell of the company and is reportedly seeking buyers (Hawranek Dietmar, 19 February 2007).
Daimler on the other hand has shown steady growth and increased sales. In 2006, Daimler showed an operating income of 8.84 billion USD up from 7.28 billon USD in 2005. The earning per share of the company have also gone up to 4.17 USD from the 3.7 USD of 2005 (Isidore Chris, 14 February 2007). The credit rating company, Standard & Poor's, have brought down the rating of the (US) company from BBB+ to BBB and have given it a negative outlook since they have strong doubts about any possible recovery by the company. This downgrade is a strong blow as it would make credit companies and banks think twice before involving themselves on this company or backing any investor who would be interested in it (Harnischfeger et al, 22 October 2003).
5. CONCLUSION
The Daimler Chrysler Merger is an example of how technologically advanced and financial strong market leaders manage to bring down a merger that should have worked wonders and turned the merged entity into a global giant. There was a cultural mismatch, poor support from the management and political issues that played a negative role in bringing down the merger. Both companies had some intrinsic strength and good, non-competitive car models and between themselves they stood a chance to cut a wide swathe in the full spectrum of the car market. Mutual distrust, bad market conditions, increased competition, hostile labour, indifferent management and many other factors caused the merger to fail. The paper should serve as a learning document for any future mergers and acquisitions that companies may undertake.
EDIT: Please excuse the clumsy English. Much of this has been poorly translated from German.
3. WHAT THE MERGER WAS SUPPOSED TO DO
The merger between Daimler Chrysler was supposed to create a vast automobile manufacturing company that would create a virtual monopoly in all market segments. The market cap was supposed to be more than 130 billion USD. Daimler had a very good presence in the premium and luxury car market while Chrysler had a good hold in the middle level car market segment. While Chrysler had managed to salvage it operation from bankruptcy on more than a few occasions, it was financially vulnerable. Daimler on the other hand had a sound business model and had enjoyed stable growth. Both these companies were expected to use their knowledge in a proactive and cooperative way to increase their business. (Surowiecki James, 15 May 1998).
The merger was also supposed to produce huge savings in the form of reduced development cost, sharing of resources and reduction in procurement and outsourcing costs. US Suppliers to Chrysler were looking forward to sales in the European market while the German suppliers looked for similar opportunities in US, South America and Canada. The market was supposed to include OEM sales as well as the spare parts market. As the editorial board of WSES put it "If Daimler Chrysler were a country, it would rank 37th in the world in terms of Gross Domestic Product, just behind Austria, but well ahead of six other members of the European Union--Greece, Portugal, Norway, Denmark, Finland and Ireland" (WSWS, 8 May 1998).
4. WHAT WENT WRONG
A number of reasons have been attributed to the failed merger and these centered around certain cultural perceptions, work methods, technology and other issues. These are discussed in this section
4.1. Clash of Cultures
Though Schrempp had announced that this was a merger of equals, this was actually not the case. Daimler has paid 37 billion USD in a stock swap exchange and it wanted good value for its money. When the merger was to be signed, the Americans had the impression that the Germans were simpletons, hard working but brilliant who had a low profile and kept to themselves. The Germans on the other hand had imagined a 'Cowboy' image of the Americans and were expecting a gung ho team. But the reality was very different as the German leader, Jürgen Schrempp, had a different background. It is reported that in one of the first meetings held on 11 December 1998 in Spain called the 'Top Management Meeting', the Germans outnumbered the Americans by two to one. It was clear that Schrempp was in charge as he rushed about, talking from the podium and shouting around. When the time came for drinks, everybody joined in the fun and it was Schrempp who sang the loudest and probably drank the most. The Americans were expecting a sober German, but they were facing someone who seemed to be more fun than their serious CEO, Eaton and it was clear who was in charge. This incident created a new paradigm shift in the relations and it was understood that the Germans with their money and superior cars would be in a dominant position. They looked down at the Americans as rather poor cousins who made small and inexpensive cars for the middle class (Vlasic et all, 5 June 2000).
4.2. Disparities in Wages
There were wide disparities in wages between the US and the German workers. It was felt the US workers were being (paid) a larger amount when compared to the amount the Germans were getting much lesser. According to Orr (Orr Deborah, 17 May 1999), Eaton, the head of Chrysler was getting about 11.7 million USD while his counter part, Schrempp was being paid about 2 million USD. The company had filed a declaration with the Securities and Exchange Commission and had declared that only 17 managers and board members were paid a total sum of 40.4 million USD. The big question that was being asked was if the US workers would have to take a pay cut or would the Germans be given a massive pay hike. The US workers would not agree to any pay cuts while the increasing the wages all around for a 440,000 workforce would mean certain financial ruin. Certain changes were made and bonus paid to the Daimler staff and the options given to the Chrysler staff disappeared when the merger came into effect. This issue continued to cause severe strain in the interactions between the US and German employees, but incidentally before the issue became very serious, the merger itself was doomed.
4.3. Different Business Models
There was an apparent clash of business models and ethics for the stakeholders. The Germans catered to the high and premium market segment and consequently followed the high cost, low volume-manufacturing model. The value proposition it offered to its customers was brand identity and exclusiveness. Chrysler on the other hand had to skim off each cent it could save and provide low cost models to a price sensitive and fuel economy minded customers. It had adopted a low cost, high volume-manufacturing model that relied on mass production techniques. Mixing and integrating these two models unfortunately did not pay off and was not handled well (Sandoz, June 2002).
4.4.Adverse Media Reporting
The media, which had initially applauded the merger, started damming the merger and everyone from lay journalists to authors had a field day in bashing the merger. This created a very bad publicity and may have hastened the failure of the merger. An excerpt from the book by Vlasic says
"But the union didn't turn out to be a merger made in heaven. When the dust settled, Daimler was firmly in control of Chrysler, and the shock waves were reverberating on both sides of the Atlantic. An American icon would lose its independence, and a German giant would grow in power and influence. Daimler chief Jurgen E. Schrempp grabbed the wheel of DaimlerChrysler. His co-chairman from Chrysler, Robert J. Eaton, took a back seat. And Thomas T. Stallkamp, Chrysler's president, got caught in between." (Vlasic et all, 5 June 2000)
Such writings were published day in and day out and caused much anger and distrust among the Americans who believed that they had been 'conned' and 'taken for a ride' by the wily Germans
4.5.Technology Issues
Chrysler had certain technologies that could have helped the German company. Chrysler had always used the front wheel drive transmission that got power from the New Venture gearbox that had been developed along with General motors. This was supposed to help the Daimler cars, which were always rear drive vehicles. Mercedes on the other hand had the famous 5 speed automatic transmission that are standard features in its cars while this technology was not used at all by Chrysler. While Chrysler always led in the 2 (??? nonesense) stroke petrol engine that has been termed as more powerful but 'gas guzzling', Germans had advance in the field of 4 stroke direct injection diesel engines. If the Mercedes engine could be adapted to the Chrysler vehicles and vice versa, then a very competitive model could have been developed for Chrysler in the 4 cylinders to 12 cylinder automobiles. Daimler cars were renowned for certain safety measures that were built into the cars and these included features such as anti lock braking systems, smart baby seats, ultrasonic obstacle detectors, seat belt pre-tensioners, safety air bags and others. Chrysler did not implement these systems in their cars since they felt there was no need for these innovations, cost of the car would go up and finds lesser takers. Chrysler had used aluminium and impact resistance composite materials in the body panel construction. This could have been used by Daimler to improve the fuel economy of their cars since the German company had always used gage steel sheets for the body panel work. Both the companies had developed prototypes of hybrid vehicles that could run on alternative fuels such as electricity, bio diesel, fuel cells, hydrogen based fuel cells and so on. But common projects were never taken up to develop these vehicles. Unfortunately deep distrust and 'we are better' attitude acted as sound barriers for knowledge sharing. The benefits in engineering knowledge remained isolated in their respective companies (Herman Don, June 1998).
4.6. Cost Cutting Measures
With reducing sales and increasing overheads, there was an urgent need to control costs. The management decided to cut about 13,000 jobs and close a number of plants and factories. This was deemed necessary since sales were down and there was excess capacity, so closing down idle plants was the immediate solution to control costs. This has created a lot if unrest in the workforce and the labour unions (Hawranek Dietmar, 19 February 2007).
4.7. Market Segments Issues
Chrysler had an upper hand in the gas-guzzling card such as the SUVs and the minivan. While these vehicles were popular in the early 1990s, the market demand for these cars fell in the early 2000's. While there was a demand for fuel efficient, compact cars, Chrysler did not have any good car model to meet this demand. Consequently, Chrysler lost about 1.5 billion USD in 2006. There have been increasing demands from major shareholders such as the Deutsche Bank to sell off the ailing unit (Heading For Divorce, 4 April 2004).
4.8. Where the merger stands now
Daimler had reportedly spent 36billion USD to acquire Chrysler. With steeply falling sales, Chrysler is worth only about 14 billion dollars and it has a pension and health liability of 12 billion USD. This leaves a very small operating margin. Daimler has announced that it wants to sell of the company and is reportedly seeking buyers (Hawranek Dietmar, 19 February 2007).
Daimler on the other hand has shown steady growth and increased sales. In 2006, Daimler showed an operating income of 8.84 billion USD up from 7.28 billon USD in 2005. The earning per share of the company have also gone up to 4.17 USD from the 3.7 USD of 2005 (Isidore Chris, 14 February 2007). The credit rating company, Standard & Poor's, have brought down the rating of the (US) company from BBB+ to BBB and have given it a negative outlook since they have strong doubts about any possible recovery by the company. This downgrade is a strong blow as it would make credit companies and banks think twice before involving themselves on this company or backing any investor who would be interested in it (Harnischfeger et al, 22 October 2003).
5. CONCLUSION
The Daimler Chrysler Merger is an example of how technologically advanced and financial strong market leaders manage to bring down a merger that should have worked wonders and turned the merged entity into a global giant. There was a cultural mismatch, poor support from the management and political issues that played a negative role in bringing down the merger. Both companies had some intrinsic strength and good, non-competitive car models and between themselves they stood a chance to cut a wide swathe in the full spectrum of the car market. Mutual distrust, bad market conditions, increased competition, hostile labour, indifferent management and many other factors caused the merger to fail. The paper should serve as a learning document for any future mergers and acquisitions that companies may undertake.
EDIT: Please excuse the clumsy English. Much of this has been poorly translated from German.
Last edited by Glyn M Ruck; 11-16-2013 at 11:31 AM.
11-16-2013, 12:57 AM
#35
MBWorld Fanatic!
Thread Starter
JC ~ have you pulled back the rubbers to check.
JC ~ have you pulled back the rubbers to check. The W204's in our family are long gone so I can't go to the garage & check. I have never seen a Benz without door drains. Had breakfast with Benz today & drove the new S Class. S500 & the S400 Hybrid. What a wonderful car. Loved the experience although the sensation of seat bolsters pumping up as you corner is a little strange initially. The suspension with active road scanning to predict bumps, potholes, speed bumps etc is phenomenal as are the multiple active LED headlights. The new class leader again!
The outer bottom door seal is fixed . Partial removal reveals drain holes in the doors feeding into the outer door seal which has a hidden internal channel ending at the trailing edge of the door. The clever Bs tricked an old Aussie!!
The problem is that this outer door seal would have to be removed to check whether the holes are clear. I don't know how long the plastic clips would last with this treatment. I suppose a compressed air nozzle up the seals drain occasionally would clear any debris.
Thanks for the tip.
Were ever you two on the Uni debating team ?.
JC
11-16-2013, 01:02 AM
#37
MBWorld Fanatic!
This is probably a fair post Daimler Chrysler evaluation of the failed merger that we could both live with. The preamble that I've edited out for size considerations purely covers the respective size of the 2 before merger & all the Kerkorian nonesense plus all the reference material used in the study. This all reduced to layman's language.
3. WHAT THE MERGER WAS SUPPOSED TO DO
The merger between Daimler Chrysler was supposed to create a vast automobile manufacturing company that would create a virtual monopoly in all market segments. The market cap was supposed to be more than 130 billion USD. Daimler had a very good presence in the premium and luxury car market while Chrysler had a good hold in the middle level car market segment. While Chrysler had managed to salvage it operation from bankruptcy on more than a few occasions, it was financially vulnerable. Daimler on the other hand had a sound business model and had enjoyed stable growth. Both these companies were expected to use their knowledge in a proactive and cooperative way to increase their business. (Surowiecki James, 15 May 1998).
The merger was also supposed to produce huge savings in the form of reduced development cost, sharing of resources and reduction in procurement and outsourcing costs. US Suppliers to Chrysler were looking forward to sales in the European market while the German suppliers looked for similar opportunities in US, South America and Canada. The market was supposed to include OEM sales as well as the spare parts market. As the editorial board of WSES put it "If Daimler Chrysler were a country, it would rank 37th in the world in terms of Gross Domestic Product, just behind Austria, but well ahead of six other members of the European Union--Greece, Portugal, Norway, Denmark, Finland and Ireland" (WSWS, 8 May 1998).
4. WHAT WENT WRONG
A number of reasons have been attributed to the failed merger and these cantered around certain cultural perceptions, work methods, technology and other issues. These are discussed in this section
4.1. Clash of Cultures
Though Schrempp had announced that this was a merger of equals, this was actually not the case. Daimler has paid 37 billion USD in a stock swap exchange and it wanted good value for its money. When the merger was to be signed, the Americans had the impression that the Germans were simpletons, hard working but brilliant who had a low profile and kept to themselves. The Germans on the other hand had imagined a 'Cowboy' image of the Americans and were expecting a gung ho team. But the reality was very different as the German leader, Jürgen Schrempp, had a different background. It is reported that in one of the first meetings held on 11 December 1998 in Spain called the 'Top Management Meeting', the Germans outnumbered the Americans by two to one. It was clear that Schrempp was in charge as he rushed about, talking from the podium and shouting around. When the time came for drinks, everybody joined in the fun and it was Schrempp who sang the loudest and probably drank the most. The Americans were expecting a sober German, but they were facing someone who seemed to be more fun than their serious CEO, Eaton and it was clear who was in charge. This incident created a new paradigm shift in the relations and it was understood that the Germans with their money and superior cars would be in a dominant position. They looked down at the Americans as rather poor cousins who made small and inexpensive cars for the middle class (Vlasic et all, 5 June 2000).
4.2. Disparities in Wages
There were wide disparities in wages between the US and the German workers. It was felt the US workers were being a larger amount when compared to the amount the Germans were getting much lesser. According to Orr (Orr Deborah, 17 May 1999), Eaton, the head of Chrysler was getting about 11.7 million USD while his counter part, Schrempp was being paid about 2 million USD. The company had filed a declaration with the Securities and Exchange Commission and had declared that only 17 managers and board members were paid a total sum of 40.4 million USD. The big question that was being asked was if the US workers would have to take a pay cut or would the Germans be given a massive pay hike. The US workers would not agree to any pay cuts while the increasing the wages all around for a 440,000 workforce would mean certain financial ruin. Certain changes were made and bonus paid to the Daimler staff and the options given to the Chrysler staff disappeared when the merger came into effect. This issue continued to cause severe strain in the interactions between the US and German employees, but incidentally before the issue became very serious, the merger itself was doomed.
4.3. Different Business Models
There was an apparent clash of business models and ethics for the stakeholders. The Germans catered to the high and premium market segment and consequently followed the high cost, low volume-manufacturing model. The value proposition it offered to its customers was brand identity and exclusiveness. Chrysler on the other hand had to skim off each cent it could save and provide low cost models to a price sensitive and fuel economy minded customers. It had adopted a low cost, high volume-manufacturing model that relied on mass production techniques. Mixing and integrating these two models unfortunately did not pay off and was not handled well (Sandoz, June 2002).
4.4.Adverse Media Reporting
The media, which had initially applauded the merger, started damming the merger and everyone from lay journalists to authors had a field day in bashing the merger. This created a very bad publicity and may have hastened the failure of the merger. An excerpt from the book by Vlasic says
"But the union didn't turn out to be a merger made in heaven. When the dust settled, Daimler was firmly in control of Chrysler, and the shock waves were reverberating on both sides of the Atlantic. An American icon would lose its independence, and a German giant would grow in power and influence. Daimler chief Jurgen E. Schrempp grabbed the wheel of DaimlerChrysler. His co-chairman from Chrysler, Robert J. Eaton, took a back seat. And Thomas T. Stallkamp, Chrysler's president, got caught in between." (Vlasic et all, 5 June 2000)
Such writings were published day in and day out and caused much anger and distrust among the Americans who believed that they had been 'conned' and 'taken for a ride' by the wily Germans
4.5.Technology Issues
Chrysler had certain technologies that could have helped the German company. Chrysler had always used the front wheel drive transmission that got power from the New Venture gearbox that had been developed along with General motors. This was supposed to help the Daimler cars, which were always rear drive vehicles. Mercedes on the other hand had the famous 5 speed automatic transmission that are standard features in its cars while this technology was not used at all by Chrysler. While Chrysler always led in the 2 stroke petrol engine that has been termed as more powerful but 'gas guzzling', Germans had advance in the field of 4 stroke direct injection diesel engines. If the Mercedes engine could be adapted to the Chrysler vehicles and vice versa, then a very competitive model could have been developed for Chrysler in the 4 cylinders to 12 cylinder automobiles. Daimler cars were renowned for certain safety measures that were built into the cars and these included features such as anti lock braking systems, smart baby seats, ultrasonic obstacle detectors, seat belt pre-tensioners, safety air bags and others. Chrysler did not implement these systems in their cars since they felt there was no need for these innovations, cost of the car would go up and finds lesser takers. Chrysler had used aluminium and impact resistance composite materials in the body panel construction. This could have been used by Daimler to improve the fuel economy of their cars since the German company had always used gage steel sheets for the body panel work. Both the companies had developed prototypes of hybrid vehicles that could run on alternative fuels such as electricity, bio diesel, fuel cells, hydrogen based fuel cells and so on. But common projects were never taken up to develop these vehicles. Unfortunately deep distrust and 'we are better' attitude acted as sound barriers for knowledge sharing. The benefits in engineering knowledge remained isolated in their respective companies (Herman Don, June 1998).
4.6. Cost Cutting Measures
With reducing sales and increasing overheads, there was an urgent need to control costs. The management decided to cut about 13,000 jobs and close a number of plants and factories. This was deemed necessary since sales were down and there was excess capacity, so closing down idle plants was the immediate solution to control costs. This has created a lot if unrest in the workforce and the labour unions (Hawranek Dietmar, 19 February 2007).
4.7. Market Segments Issues
Chrysler had an upper hand in the gas-guzzling card such as the SUVs and the minivan. While these vehicles were popular in the early 1990s, the market demand for these cars fell in the early 2000's. While there was a demand for fuel efficient, compact cars, Chrysler did not have any good car model to meet this demand. Consequently, Chrysler lost about 1.5 billion USD in 2006. There have been increasing demands from major shareholders such as the Deutsche Bank to sell off the ailing unit (Heading For Divorce, 4 April 2004).
4.8. Where the merger stands now
Daimler had reportedly spent 36billion USD to acquire Chrysler. With steeply falling sales, Chrysler is worth only about 14 billion dollars and it has a pension and health liability of 12 billion USD. This leaves a very small operating margin. Daimler has announced that it wants to sell of the company and is reportedly seeking buyers (Hawranek Dietmar, 19 February 2007).
Daimler on the other hand has shown steady growth and increased sales. In 2006, Daimler showed an operating income of 7.28 billion USD up from 8.84 billon USD in 2005. The earning per share of the company have also gone up to 4.17 USD from the 3.7 USD of 2005 (Isidore Chris, 14 February 2007). The credit rating company, Standard & Poor's, have brought down the rating of the company from BBB+ to BBB and have given it a negative outlook since they have strong doubts about any possible recovery by the company. This downgrade is a strong blow as it would make credit companies and banks think twice before involving themselves on this company or backing any investor who would be interested in it (Harnischfeger et all, 22 October 2003).
5. CONCLUSION
The Daimler Chrysler Merger is an example of how technologically advanced and financial strong market leaders manage to bring down a merger that should have worked wonders and turned the merged entity into a global giant. There was a cultural mismatch, poor support from the management and political issues that played a negative role in bringing down the merger. Both companies had some intrinsic strength and good, non-competitive car models and between themselves they stood a chance to cut a wide swathe in the full spectrum of the car market. Mutual distrust, bad market conditions, increased competition, hostile labour, indifferent management and many other factors caused the merger to fail. The paper should serve as a learning document for any future mergers and acquisitions that companies may undertake.
3. WHAT THE MERGER WAS SUPPOSED TO DO
The merger between Daimler Chrysler was supposed to create a vast automobile manufacturing company that would create a virtual monopoly in all market segments. The market cap was supposed to be more than 130 billion USD. Daimler had a very good presence in the premium and luxury car market while Chrysler had a good hold in the middle level car market segment. While Chrysler had managed to salvage it operation from bankruptcy on more than a few occasions, it was financially vulnerable. Daimler on the other hand had a sound business model and had enjoyed stable growth. Both these companies were expected to use their knowledge in a proactive and cooperative way to increase their business. (Surowiecki James, 15 May 1998).
The merger was also supposed to produce huge savings in the form of reduced development cost, sharing of resources and reduction in procurement and outsourcing costs. US Suppliers to Chrysler were looking forward to sales in the European market while the German suppliers looked for similar opportunities in US, South America and Canada. The market was supposed to include OEM sales as well as the spare parts market. As the editorial board of WSES put it "If Daimler Chrysler were a country, it would rank 37th in the world in terms of Gross Domestic Product, just behind Austria, but well ahead of six other members of the European Union--Greece, Portugal, Norway, Denmark, Finland and Ireland" (WSWS, 8 May 1998).
4. WHAT WENT WRONG
A number of reasons have been attributed to the failed merger and these cantered around certain cultural perceptions, work methods, technology and other issues. These are discussed in this section
4.1. Clash of Cultures
Though Schrempp had announced that this was a merger of equals, this was actually not the case. Daimler has paid 37 billion USD in a stock swap exchange and it wanted good value for its money. When the merger was to be signed, the Americans had the impression that the Germans were simpletons, hard working but brilliant who had a low profile and kept to themselves. The Germans on the other hand had imagined a 'Cowboy' image of the Americans and were expecting a gung ho team. But the reality was very different as the German leader, Jürgen Schrempp, had a different background. It is reported that in one of the first meetings held on 11 December 1998 in Spain called the 'Top Management Meeting', the Germans outnumbered the Americans by two to one. It was clear that Schrempp was in charge as he rushed about, talking from the podium and shouting around. When the time came for drinks, everybody joined in the fun and it was Schrempp who sang the loudest and probably drank the most. The Americans were expecting a sober German, but they were facing someone who seemed to be more fun than their serious CEO, Eaton and it was clear who was in charge. This incident created a new paradigm shift in the relations and it was understood that the Germans with their money and superior cars would be in a dominant position. They looked down at the Americans as rather poor cousins who made small and inexpensive cars for the middle class (Vlasic et all, 5 June 2000).
4.2. Disparities in Wages
There were wide disparities in wages between the US and the German workers. It was felt the US workers were being a larger amount when compared to the amount the Germans were getting much lesser. According to Orr (Orr Deborah, 17 May 1999), Eaton, the head of Chrysler was getting about 11.7 million USD while his counter part, Schrempp was being paid about 2 million USD. The company had filed a declaration with the Securities and Exchange Commission and had declared that only 17 managers and board members were paid a total sum of 40.4 million USD. The big question that was being asked was if the US workers would have to take a pay cut or would the Germans be given a massive pay hike. The US workers would not agree to any pay cuts while the increasing the wages all around for a 440,000 workforce would mean certain financial ruin. Certain changes were made and bonus paid to the Daimler staff and the options given to the Chrysler staff disappeared when the merger came into effect. This issue continued to cause severe strain in the interactions between the US and German employees, but incidentally before the issue became very serious, the merger itself was doomed.
4.3. Different Business Models
There was an apparent clash of business models and ethics for the stakeholders. The Germans catered to the high and premium market segment and consequently followed the high cost, low volume-manufacturing model. The value proposition it offered to its customers was brand identity and exclusiveness. Chrysler on the other hand had to skim off each cent it could save and provide low cost models to a price sensitive and fuel economy minded customers. It had adopted a low cost, high volume-manufacturing model that relied on mass production techniques. Mixing and integrating these two models unfortunately did not pay off and was not handled well (Sandoz, June 2002).
4.4.Adverse Media Reporting
The media, which had initially applauded the merger, started damming the merger and everyone from lay journalists to authors had a field day in bashing the merger. This created a very bad publicity and may have hastened the failure of the merger. An excerpt from the book by Vlasic says
"But the union didn't turn out to be a merger made in heaven. When the dust settled, Daimler was firmly in control of Chrysler, and the shock waves were reverberating on both sides of the Atlantic. An American icon would lose its independence, and a German giant would grow in power and influence. Daimler chief Jurgen E. Schrempp grabbed the wheel of DaimlerChrysler. His co-chairman from Chrysler, Robert J. Eaton, took a back seat. And Thomas T. Stallkamp, Chrysler's president, got caught in between." (Vlasic et all, 5 June 2000)
Such writings were published day in and day out and caused much anger and distrust among the Americans who believed that they had been 'conned' and 'taken for a ride' by the wily Germans
4.5.Technology Issues
Chrysler had certain technologies that could have helped the German company. Chrysler had always used the front wheel drive transmission that got power from the New Venture gearbox that had been developed along with General motors. This was supposed to help the Daimler cars, which were always rear drive vehicles. Mercedes on the other hand had the famous 5 speed automatic transmission that are standard features in its cars while this technology was not used at all by Chrysler. While Chrysler always led in the 2 stroke petrol engine that has been termed as more powerful but 'gas guzzling', Germans had advance in the field of 4 stroke direct injection diesel engines. If the Mercedes engine could be adapted to the Chrysler vehicles and vice versa, then a very competitive model could have been developed for Chrysler in the 4 cylinders to 12 cylinder automobiles. Daimler cars were renowned for certain safety measures that were built into the cars and these included features such as anti lock braking systems, smart baby seats, ultrasonic obstacle detectors, seat belt pre-tensioners, safety air bags and others. Chrysler did not implement these systems in their cars since they felt there was no need for these innovations, cost of the car would go up and finds lesser takers. Chrysler had used aluminium and impact resistance composite materials in the body panel construction. This could have been used by Daimler to improve the fuel economy of their cars since the German company had always used gage steel sheets for the body panel work. Both the companies had developed prototypes of hybrid vehicles that could run on alternative fuels such as electricity, bio diesel, fuel cells, hydrogen based fuel cells and so on. But common projects were never taken up to develop these vehicles. Unfortunately deep distrust and 'we are better' attitude acted as sound barriers for knowledge sharing. The benefits in engineering knowledge remained isolated in their respective companies (Herman Don, June 1998).
4.6. Cost Cutting Measures
With reducing sales and increasing overheads, there was an urgent need to control costs. The management decided to cut about 13,000 jobs and close a number of plants and factories. This was deemed necessary since sales were down and there was excess capacity, so closing down idle plants was the immediate solution to control costs. This has created a lot if unrest in the workforce and the labour unions (Hawranek Dietmar, 19 February 2007).
4.7. Market Segments Issues
Chrysler had an upper hand in the gas-guzzling card such as the SUVs and the minivan. While these vehicles were popular in the early 1990s, the market demand for these cars fell in the early 2000's. While there was a demand for fuel efficient, compact cars, Chrysler did not have any good car model to meet this demand. Consequently, Chrysler lost about 1.5 billion USD in 2006. There have been increasing demands from major shareholders such as the Deutsche Bank to sell off the ailing unit (Heading For Divorce, 4 April 2004).
4.8. Where the merger stands now
Daimler had reportedly spent 36billion USD to acquire Chrysler. With steeply falling sales, Chrysler is worth only about 14 billion dollars and it has a pension and health liability of 12 billion USD. This leaves a very small operating margin. Daimler has announced that it wants to sell of the company and is reportedly seeking buyers (Hawranek Dietmar, 19 February 2007).
Daimler on the other hand has shown steady growth and increased sales. In 2006, Daimler showed an operating income of 7.28 billion USD up from 8.84 billon USD in 2005. The earning per share of the company have also gone up to 4.17 USD from the 3.7 USD of 2005 (Isidore Chris, 14 February 2007). The credit rating company, Standard & Poor's, have brought down the rating of the company from BBB+ to BBB and have given it a negative outlook since they have strong doubts about any possible recovery by the company. This downgrade is a strong blow as it would make credit companies and banks think twice before involving themselves on this company or backing any investor who would be interested in it (Harnischfeger et all, 22 October 2003).
5. CONCLUSION
The Daimler Chrysler Merger is an example of how technologically advanced and financial strong market leaders manage to bring down a merger that should have worked wonders and turned the merged entity into a global giant. There was a cultural mismatch, poor support from the management and political issues that played a negative role in bringing down the merger. Both companies had some intrinsic strength and good, non-competitive car models and between themselves they stood a chance to cut a wide swathe in the full spectrum of the car market. Mutual distrust, bad market conditions, increased competition, hostile labour, indifferent management and many other factors caused the merger to fail. The paper should serve as a learning document for any future mergers and acquisitions that companies may undertake.
-Daimler management directed a variety of non-competitive product actions against the wishes of Chrysler management which rendered cars increasingly sales-proof, ranging from bizarrely unattactive Durangos (which required emergency exterior redesigns) to Calibers which missed many important criteria, to general decontenting which rendered most products less desirable.
-Daimler clearly drained Chrysler cash for corporate profitability at home, "relieving" Chrysler of resources for the pursuit of its market objectives.
-Daimler had a wide-ranging disregard for the management team which had brought Chrysler to the success which made it attractive to purchase, further disenfranchising the employee population as unknown execs without local market knowledge were installed.
-With many of the same people and processes, Fiat and Sergio Marchionne have been extremely successful creating a very successful US company, even as the Fiat brand is struggling in the European market slump, demonstrating the potential for a more effective management style.
11-16-2013, 01:21 AM
#40
Super Moderator
There is much here which is true. Some key points omitted:
-Daimler management directed a variety of non-competitive product actions against the wishes of Chrysler management which rendered cars increasingly sales-proof, ranging from bizarrely unattactive Durangos (which required emergency exterior redesigns) to Calibers which missed many important criteria, to general decontenting which rendered most products less desirable.
-Daimler clearly drained Chrysler cash for corporate profitability at home, "relieving" Chrysler of resources for the pursuit of its market objectives.
-Daimler had a wide-ranging disregard for the management team which had brought Chrysler to the success which made it attractive to purchase, further disenfranchising the employee population as unknown execs without local market knowledge were installed.
-With many of the same people and processes, Fiat and Sergio Marchionne have been extremely successful creating a very successful US company, even as the Fiat brand is struggling in the European market slump, demonstrating the potential for a more effective management style.
-Daimler management directed a variety of non-competitive product actions against the wishes of Chrysler management which rendered cars increasingly sales-proof, ranging from bizarrely unattactive Durangos (which required emergency exterior redesigns) to Calibers which missed many important criteria, to general decontenting which rendered most products less desirable.
-Daimler clearly drained Chrysler cash for corporate profitability at home, "relieving" Chrysler of resources for the pursuit of its market objectives.
-Daimler had a wide-ranging disregard for the management team which had brought Chrysler to the success which made it attractive to purchase, further disenfranchising the employee population as unknown execs without local market knowledge were installed.
-With many of the same people and processes, Fiat and Sergio Marchionne have been extremely successful creating a very successful US company, even as the Fiat brand is struggling in the European market slump, demonstrating the potential for a more effective management style.
And Schrempp did Fiat a favour. He did what Lee Iacocca did & skimmed off that crap top layer of management that allowed suppressed people below them to flourish. Fiat took over a different company.
JC ~ no I was not in the Uni as you call it, or 'Varsity as we call it, debating team. My testy or irascible style would have assured failure.
The overpayment of semi & unskilled labour in the US will continue to cause it's corporations trouble in the future as they now have to compete on a level playing field with ROW. Something they did not have to do post WW2 while everybody was repairing/rebuilding their bombed out countries.
The US needs to upskill it's labour force for the high wages they expect & have got used to. The honeymoon is over.
Last edited by Glyn M Ruck; 11-16-2013 at 02:32 AM.
11-16-2013, 01:56 AM
#41
Super Moderator
I used to love CNN's "Crossfire" in the old days when I lived in Dallas with Bob Novak, John Sununu, & Geraldine Ferraro,
11-16-2013, 04:17 AM
#42
MBWorld Fanatic!
Body panel steel is body panel steel . Add moisture & you have corrosion if there is a fault with the protection. Can't see the 747/787 relationship. 
also from what i remember it had something todo with a european rule up untill the mid 2000's with some paint materials which resulted in bad quality paint and in turn resulted in lots of rust.
other car companies used more paint to counter, MB didn't
11-16-2013, 08:13 AM
#43
Senior Member
11-16-2013, 08:55 AM
#44
MBWorld Fanatic!
Carsy, I understand your thoughts about a throw away society but, in general, cars and larger durable goods don't fall into that category.
11-16-2013, 09:04 AM
#45
Senior Member
Not a low blow at all. Just putting facts up against a sick generalization of an entire continent and it's people.
As if Australian society is so much more enlightened. I'm sure they have their version of the Kardashians down there!
As if Australian society is so much more enlightened. I'm sure they have their version of the Kardashians down there!
11-16-2013, 11:00 AM
#46
Super Moderator
In fact without Holden GM would not have been able to ditch the cart springs & live rear axle in the recent Camaro & Corvette designs. They lifted the design direct from Holden Special Vehicles division.
11-16-2013, 11:14 AM
#48
Senior Member
Yes, Glyn, GM (headquartered where?...ah yes, the throw away society of North America) has produced some fine automobiles in Australia. As has Ford. Another North American company. Neither firms seem 100% wedded to the island lately.
Just pointing out...watch the insults. I'm surprised you would allow them to happen. This place always seemed classier than the more juvenile auto sites I've seen.
BTW - those Holdens are increasingly becoming part of N.A. police fleets since the Crown Vic is no longer.
Just pointing out...watch the insults. I'm surprised you would allow them to happen. This place always seemed classier than the more juvenile auto sites I've seen.
BTW - those Holdens are increasingly becoming part of N.A. police fleets since the Crown Vic is no longer.
11-16-2013, 12:10 PM
#49
Super Moderator
Today they are global companies & some of their face saving designs come from outside the US divisions. Ford has worked hard with it's European divisions on cars like Focus, Fiesta & Mondeo (Fusion) as an example & to build single global platforms ~ extremely sensible. Local packaging can vary to suit local tastes.
I agree that in Aus (a country with a population the size of Sao Paulo city in Brazil) that it is hard to make a business case for home grown cars nevermind how heavily they lean on the international parts bin. The Commodore of which you see an example above started with a widened & lengthened Opel chassis out of Europe. Local suspension development, Older GM engine designs that Aus developed for fuel injection & modernised for local build. Borg Warner Australia transmission & German rear axle from Opel built in Aus. A real hotch potch. Having lived in both the US & Australia & driven a Holden Berlina as a company car so as not to upset the locals (A mention of Benz horrified them so I took a well appointed Holden & pocketed half my car allowance to be culturally sensitive & fit in as an ex pat). The Berlina was a pleasant car with a cheap & tacky interior but then it is a cheap car by Aus standards.
The only reason the business model works is that Ford & Holden have the lions share of sales in the country. You are either a Ford or Holden man. This rivalry goes from the pub to the hugely supported V8 Supercars racing series.
I see no insults here. This is a cultural issue. In Aus & SA this would be considered normal friendly banter and create no ill feeling/sensitivity whatsoever. JC & I would buy one another a beer & continue the chat in far more robust fashion than anything seen here.
In the eyes of ROW the US is considered a wastefull toss-out society. Is this deserved ~ Yes mostly. Should the comment create any sensitivity ~ No. It is merely an honest perspective.
I agree that in Aus (a country with a population the size of Sao Paulo city in Brazil) that it is hard to make a business case for home grown cars nevermind how heavily they lean on the international parts bin. The Commodore of which you see an example above started with a widened & lengthened Opel chassis out of Europe. Local suspension development, Older GM engine designs that Aus developed for fuel injection & modernised for local build. Borg Warner Australia transmission & German rear axle from Opel built in Aus. A real hotch potch. Having lived in both the US & Australia & driven a Holden Berlina as a company car so as not to upset the locals (A mention of Benz horrified them so I took a well appointed Holden & pocketed half my car allowance to be culturally sensitive & fit in as an ex pat). The Berlina was a pleasant car with a cheap & tacky interior but then it is a cheap car by Aus standards.
The only reason the business model works is that Ford & Holden have the lions share of sales in the country. You are either a Ford or Holden man. This rivalry goes from the pub to the hugely supported V8 Supercars racing series.
I see no insults here. This is a cultural issue. In Aus & SA this would be considered normal friendly banter and create no ill feeling/sensitivity whatsoever. JC & I would buy one another a beer & continue the chat in far more robust fashion than anything seen here.
In the eyes of ROW the US is considered a wastefull toss-out society. Is this deserved ~ Yes mostly. Should the comment create any sensitivity ~ No. It is merely an honest perspective.
11-16-2013, 12:18 PM
#50
MBWorld Fanatic!
Good morning/day/evening! Well rested, fingertips have sensation again, and my weekend chores are complete!
First, I have to disagree with the below quote even more strongly!
I find you to be neither of those. You have passion for your friend and your beliefs, which I respect, and you carried out this interesting chat quite gracefully overall (ok...."narrow" US got a bit close, but not too "testy", I guess, as South Africans go.....kidding!!!
) I may not always agree with you, but I am always interested in hearing what you have to say, and will always defend your right to say it! You will forever have the right to be wrong!
This next part actually troubled me, the more I thought about it:
It seems to suggest that professional journalists or business people are so susceptible to either regionality or pandering that they cannot objectively look at a set of facts and draw the same conclusions as colleagues in other regions. If so, that is a very distressing analysis of the highly educated, professionally trained human mind.
I cannot escape the conclusion that the merger was a disaster, and I think that is generally accepted. Therefore, I also conclude, attempting to be as objective as my skills allow, that the company, when merged, was not well managed. Consequently, accepting your input that Daimler was not prepared for what they found, I see only two alternative root causes:
1) They failed to do sufficient due diligence to truly understand what they were buying.....or
2) They were aware of what they were buying, but lacked the skills to run the company successfully.
As for #2, I don't recall the last time I was successful using the rationale that the job was too difficult to explain a performance which was less than satisfactory. I also think it is inescapable that in their failure, they took a company which was successful on day #1 of their stewardship and almost destroyed it by the time they left town.
As for the less jocular inter-national comments starting to develop here, let's please not go down that road. We all have things of which to be proud and we also all have the opposite. If you're not good at comedy or can't make it clear you are at least trying for humor, please let any real antagonism out of your system elsewhere. Thanks!
First, I have to disagree with the below quote even more strongly!
I find you to be neither of those. You have passion for your friend and your beliefs, which I respect, and you carried out this interesting chat quite gracefully overall (ok...."narrow" US got a bit close, but not too "testy", I guess, as South Africans go.....kidding!!!
) I may not always agree with you, but I am always interested in hearing what you have to say, and will always defend your right to say it! You will forever have the right to be wrong! This next part actually troubled me, the more I thought about it:
I cannot escape the conclusion that the merger was a disaster, and I think that is generally accepted. Therefore, I also conclude, attempting to be as objective as my skills allow, that the company, when merged, was not well managed. Consequently, accepting your input that Daimler was not prepared for what they found, I see only two alternative root causes:
1) They failed to do sufficient due diligence to truly understand what they were buying.....or
2) They were aware of what they were buying, but lacked the skills to run the company successfully.
As for #2, I don't recall the last time I was successful using the rationale that the job was too difficult to explain a performance which was less than satisfactory. I also think it is inescapable that in their failure, they took a company which was successful on day #1 of their stewardship and almost destroyed it by the time they left town.
As for the less jocular inter-national comments starting to develop here, let's please not go down that road. We all have things of which to be proud and we also all have the opposite. If you're not good at comedy or can't make it clear you are at least trying for humor, please let any real antagonism out of your system elsewhere. Thanks!
