In the latest BusinessWeek there is a good article on DC. It confirms my suspicions about the merger, and it's effect on MB. Here is a clip from this article: http://www.businessweek.com/magazine...7016_mz001.htm

 

Its a very interesting read and it really does show whats wrong with Mercedes and how Dieter will have a hard time fixing what Schremp did.

 

I think that was an incredible read.
It hits spot on with topics concerning how the deal should and might go down.

Plus, it's free information.

 

I've been trying to make these points for a few months here now, and it was falling one some deaf ears... but lets face it folks.. MB was the undisputed King only a few years ago... now we have Audi, BMW, Lexus, Acura, et al all neck and neck!

 

Great article , I sure hope I see the day when MB drops Chrysler.

 

I used to hope for the very same thing, but if they did, MB may end up being small enough to be sold off itself, and that would not be a good thing!!

 

Probably not going to happen just yet, as Chrysler is the money maker right now.

 

i don't quite agree with everything the article said. although i've no background in business so my comments should be taken with a pinch of salt.

Schrempp of course made many mistakes, but there was only one major one: getting lazy. let's not forget that despite sending teams to fix chrysler, mercedes managed to deliver innovations such as AirMatic, SBC, Keyless-Go, COMAND3 (on the W221) etc. they had the budget to do do quality, what they didn't have was the impetus, the drive, to do it. instead, they sat on their fat profits. as a result, a huge amount of money had to be wasted to FIX the problems -- always a lot more expensive than good planning in the first place.

there is nothing wrong with building a huge range of cars from big to small. Audi has the A3 as well -- roughly in the same price range as the A-class, and nobody is complaining about it. BMW has the 1-series. what the problem is is compromising on quality -- and that is what mercedes has fixed with the new A-class. in fact, i would say that if mercedes didn't do the A-class and proved that brand image can extend to all price ranges, there wouldn't be a 1-series, 3-series compact, or A3 today. of course, i have no stats to back that up, but it was the A-class that got all the publicity -- and let's not forget it sold over a million, which is a huge achievement for any car, even a budget one.

mercedes, in buying chrysler, got a car-maker on a shoestring. it was a great deal -- that is why chrysler shareholders are suing now. and they COULD have done the same thing at Mitsubishi, IF they had someone like Zetsche.

brand-image is the big problem. i'd say mercedes cars in general have no more problems than BMW, Jaguar, or Audi -- none of which are noted for quality, particularly long-term quality. but a few years of high profile problem cars has made people afraid of them. in fact, a look inside the new 1-, 3-, X3, and even 5- show a remarkable drop in quality -- BMW is doing exactly what mercedes was doing back in 1996, and has started correcting since 2003. but they've seen what happened, so they probably won't compromise that much -- but the trend is clear.

i think the thing to do is simply to find, or raise, good people to run chrysler, now that Zetsche is at mercedes. then DM can have their cake and eat it. as for smart, perhaps it's just too far ahead of its time -- not that many people would pay for a funky 2-seater. how is the four-4 doing? perhaps even that is too strange for many people. so on that count i would agree with the article to drop smart -- or better still, make the ultimate super-mini to give the daewoos, pandas, and kancils a run for their money. profits might be less per car, but if one can corner a large portion of the market, it could still be lucrative.

 

I own 2 Dodge trucks, a 2001 and a 2004, both Cummins Turbo Diesels, 4 wheel drive. We tow our boat and our horse trailer while using the 01 to commute with. They are awesome vehicles. Granted, they are what I need, they are not a MBZ, but then again, neither did I expect them to be. They are trucks, grunt, grunt, burp and fart, get some dirt on the tires type vehicle. So far they have had little to no warranty issues.

We recently purchased a 2002 used E320. We started shopping for a car for my wife to drive instead of the truck all the time. We began looking at brand new C classes and rolled into this 02 E class. At the time we were looking, I commented to my wife that the base model MSRP of a C class hadn't changed but by $500 or so since we bought our 1995 C220. I thought that was a bit ridiculous and then it all came together. The article said that MBZ was diluting the brand name exclusivity and that's exactly what has happened. Realistically, why would anyone go buy a $30K Chrysler, Ford, GM, or other brand name car when you could have the same vehicle and buy the MBZ and get the "snotty appeal" that comes with it for free?

I don't have the solution and am along for the ride, watching where it goes.

 

Fact is, a MB back in the 80's cost about $30,000-$40,000 depending on whether it was a 240D, or a 300SD.. adjusting for inflation those were $70,000 - $90,000 cars in today's dollar..

MB is cutting costs, trying to compete with the likes of Toyota, Nissan, GM and Ford for the $30-$60K market at the expense of quality.

I would have been more than happy to pay an additional $10,000 for my CDI it it was built to the same level of fit and finish of it's 30 year old predecessor the 300D (This takes into account advancements in manufacturing etc..). IF you adjust for those advancement in tech.. the Audi, in contrast to it's 80's grand father is a 100% better car.... whereas the Mercedes in contrast to it's grandfather is a 100% worse car...

Sit inside an $60K Audi A6 V8 with all the options, then do the same in a $60K E500... you can't help but wonder why the MB isn't standing out as the better car... it's better in many ways.. but not like the contrast between a 300D and a Audi 5000..

Chrysler culture made lots of changes at MB.. especially at MBUSA.. and this why now for example the $52K base price of a CDI or E350 doesn't include any of the basic lux options readily found on Japanese made (Labor is expensive in Japan) Acura's, Infinities, et al..

This is the problem.. MB needs to stand out again, is the undisputed king.. not just a competitor.

Edit: A lot of this is also a issue of the work ethic and national pride that made Germany great, and almost lead them to dominate the world had it not been for several major nations attacking them all at once.. these were a people that had no limit to what they could do (apart from their demographic and geographic limits that God placed on them).. but German engineering and workmanship was never open to debate back in those days.. and all the way into the 80's... This is when the MAJOR shift in German culture was made and the WWII generation (much like in our case) was moving out of the work place and being replaced by a spoiled Generation that never knew hardship; they were lazy, and expected much to be handed to them by virtue of their legacy.. well, you can't ride on a legacy.. Those who designed the 190D, the 500/540K are not involved anymore... you need to strive to keep ahead.. They didn't. I see this in their cars, their model trains (That I collect), and other consumer items (such as my washer and dryer).. a shadow of their past engineering might.

Sorry if this offends anyone.. but I think it's at least in part a factor.