David N.

I'm having a discussion on one of the bimmer boards with this guy who says he's in the know in the financial community. Basically he says that legally and financially, Chrysler owns MB. I always thought it was the other way around. He says that for image reasons, they want the public to think otherwise.

What do you guys and gals think? Is our beloved car company being comtrolled by the boys in Michigan?

DCXdynodog

no

young

mb definitely controls the company.

http://www.daimlerchrysler.com/index...0/t01117_e.htm

karl k

http://www.daimlerchrysler.com/index_e.htm

DaimlerChrysler is one of the world's leading automotive,
transportation and services companies. Its passenger car brands
include Maybach, Mercedes-Benz, Chrysler, Jeep®, Dodge and
smart. Commercial vehicles are produced under the Mercedes-Benz,
Freightliner, Sterling, Western Star, Setra, Thomas Built Buses,
Orion and American LaFrance brands. It offers financial and other
services through DaimlerChrysler Services. With 372,500 employees,
DaimlerChrysler achieved revenues of EUR 152.9 billion ($136.1
billion) in 2001.

DaimlerChrysler's Chairman Juergen Schrempp's office is at the German Headquarters in Stuttgart.

TK2001_C

MB is definitely the top dog in Detroit now. Since the merger of the two companies, the Germans have slowly moved in and taken many of the head leadership roles in the company. The Detroit suburbs have been filling up with German families. The Germans have brought their strict and rigid working environment to Chrysler. First car to be heavily influenced by MB will be the Crossfire.

Outland

This guy sounds like a complete and utter moron. He's not in the know on ANYTHING.

Poseur!!!

tifosiv122

MB controls Chrysler...and its obvious with the horrible Chrysler sales since MB took over, nearly bringing both companies down.

Read it from Forbes:

http://www.forbes.com/forbes/2001/0305/066_print.html

"Here's what happened. During the throes of the merger, DaimlerChrysler predicted that Chrysler would earn more than $5 billion in 2000, about what it earned in 1999. In late 1999 Chrysler President James P. Holden began telling Schrempp and DaimlerChrysler's management board that Chrysler could be counted on to deliver only $2.5 billion. The reason: Chrysler would have to spend billions gearing up factories to churn out new model introductions just as an economic slowdown was expected to hit. This comes from an ex-Chrysler executive who is an ally of Holden and of Robert J. Eaton, the retired DaimlerChrysler cochairman: "We kept adjusting the forecast as we went through the year, telling Schrempp, ‘It's not there, it's not there.' " But the mandate from headquarters was "Save the second quarter at all costs." Under pressure, Chrysler built about 75,000 more cars and trucks than its dealers could sell—a 15% overage—and shipped them to dealers in the second quarter as fast as it could. Channel-stuffing is what they call this behavior in the electronics business. But it's legitimate under the accounting rules. That Dodge Neon is revenue to Daimler when it arrives on a dealer's lot, not when it leaves. While other automakers were piling on ever-higher rebates, Chrysler didn't. That slowed sales by dealers but not—at least, not right away—by the manufacturer. Chrysler turned in profits of $1.1 billion, on top of the $1.3 billion it earned in the first quarter, putting it just short of its $2.5 billion target for the first half. But the boost was predictably short-lived. The pile-up of inventory forced higher rebates and other incentives in the third and fourth quarters, which drained profits. Chrysler showrooms overflowed with unsold, old-model minivans just as the new models began to arrive in August, and competitors flooded the market with incentives. In the third quarter, with car sales slowing, Chrysler lowered prices of popular minivans by $380 to $19,800. In addition it offered $3,000 rebates on the old models and $1,000 on some of the new models. A $3,000 mistake on monthly sales of roughly 30,000 minivans quickly adds up to a $90-million-a-month mess. Do it for three months and you're halfway to losing half a billion in the quarter. Chrysler executives messed up without Schrempp's help, too. Flush with record profits in the 1990s, the company added costs to its cars and trucks, expecting to be able to charge more for them. Instead, car pricing turned deflationary. A base model of the new Chrysler minivan costs $500 more to build than the comparable old model, but it sells for less."

There is more, if you want to read about it.
The buy is hailed as one of the worst mistakes in auto history, how MB destroyed a company that was doing well. I love MB, but they really messed up. For anyone to say that Chrysler has control, is just nuts.

Erik

David N.

Guys, thank you for the links. The forbes stuff is interesting. Though, this guy says he knows more than auto and business mags. He says "half the stuff I read in mags is filled with false info".

Where did MB get the capital to acquire chrysler? Chrysler is a much bigger company than MB, isn't it?

Outland

Your source doesn't have clue what he's talking about. Send us the link to your conversation...we'll all go hammer him

Technically, it was a merger. I believe the capital on both sides was in the form of a stock swap.

David N.

As for hammering him ->

As for the stock swap -> That makes sense. I think it was intended as a merger of equals in the beginning, but MB got control by default due to Chryslers dire financial position.

DCX Engineer

It was a merger, but Schrempp was always in control. The former Chrysler was 47% and DaimlerBenz was 53% of the new company. The former Chrysler WAS making annual profits equal to DaimlerBenz with a workforce a third of the size of DaimlerBenz at the time of the merger. Chrysler also controlled over 14% of the US vehicle market that Daimler wanted.

The market conditions after the merger and business plan of the former Chrysler could no longer generate the $4-5B annual profit. With increased competition Chrysler's sales declined. Chrysler was running their factories well over capacities on lots of overtime. This was very profitable when you had the buyers, but that didn't last long.

The Chrysler Group is now under the control of Dieter Zetsche and Wolfgang Bernhard. They are business men as well as car guys who are steering the company in the right direction. They have the backing of Stuttgart. In 2002 Chrysler Group posted over $1B operating profit in the first three quarters, but are only supposed to break even for the year. In 2003 Chrysler Group will make $2B.

I think Chrysler Group will succeed and allow DaimlerChrysler to become the transportation powerhouse Schremmp originally envisioned.

Note: Eaton knew what he was doing. He sold the sinking ship that needed rescuing and made over $70M in the process.

DCXdynodog

Wrong, we HAD 9 billion in cash before the "merger".

Chrysler WAS in good shape to weather the storm.

They took our $$ and won't come clean about it. The "merger" was a sham from the begining and Schremp admitted he lied about the whole thing. His lie is documented.

All this crap caused us to lose market share to GM when we should have been able to hold or even gain as we had good new products in the works. Moral was very, very low at a bad time. I watched good people with 27 years given a box and 20 min to get out.

Chrysler is surviving dispite all this, not because of it.

DCX Engineer

Actually he was armed with the K-car FWD platform and the 2.2L 4-cyl engine. Then came the first minivan.

karl k

Chrysler almost disappeared in 1980, but was BAILED OUT by US taxpayer!!

Without Congressional loans and Lee Iaccoca, Chrysler would have collapsed in 1980!!

Armed with federal loan guarantees and the "cabin forward" design gimmick, Lee Iacocca turned Chrysler around with similar success, as he did at Ford, -- where he came from.

The world economy in 1979 was falling apart.

Gas prices were doubling and the fuel efficient import cars were taking over domestic sales.

Chrysler got hit hard.

Iaccoca's Chrysler was going under and he knew it.

There was only 1 course for him to take. He went to the US Government seeking loans for a bail out. Congress was not impressed, but Lee had done his homework.

He argued that if Chrysler collapsed it would cost the country $2.75 billion dollars alone in unemployment benefits.

His speech before the US Congress was so convincing, that Iacocca and Chrysler got their loans.

In his fight for survival, Lee cut his own salary to $1 a year. Everybody in management got a salary cut except for the secretaries, who Iaccoca percieved deserving every cent they made.

Next he took on the union and said: "Look boys, I've got a shotgun to your head. I've got thousands of jobs at seventeen bucks an hour. I've got no jobs open at twenty."



http://news.smallbusinessstudio.com/...08/145037.html

MB-BOB

IMO, the term "Merger of Equals" is a sham. I've been through several "MOEs" in the telecommunications industry, and in every case, my first hand observation was that there was an acquiring company and an acquired company.

Every time a "MOE" is announced, the stock market says, "yeah, Riiiiight," and figures out immediately who is buying who, so that they can balance the arbitraging correctly for both companies.

Daimler-Benz bought Chrysler. Any contention otherwise is silly, IMO. Whether it was the right thing to do is another issue.

Lockbuster

I did my homework and if Chrysler was in control of Mercedes I would be the first not to buy a Benz. Chrysler is a POS in my book.

viper

It was a smart thing to do. When DB bought Chrysler they gained ownership of some substantial assembly plants and a coast-to-coast dealer/parts/service infrastructure that took years to set up. Plus they got this infrastructure for cheap. I would not be the least bit surprised to see Chrysler/Dodge/Plymouth bite the dust in a few years due to some "re-organizing" effort directed from Germany.

Outland

That book must never leave the library then.

Chrysler builds plenty of good products.

The 300M is an impressive large luxury sedan. Its V6 is more powerful than MB's. Its new RAM pickup is the standard to beat right now for both GM and the Japanese, its Jeep vehicles are unmatched for off road manners, and in many ways the Grand Cherokee is superior to the ML even on road. And Chryslers lowly Neon even has a version that will tear the doors off our little Coupes.

Don't be so quick to dismiss them. There's plenty MB could learn from Chrysler. I'd love to have the SRT boys look at the M271 motor, and find out why its such an underachiever for such a high tech motor with a supercharger. I'd have prefered them to remain unique companies, but that's neither here nor there anymore.

FrankW

i agree. Chrysler builds plenty of good products. just to list a few: the Viper, the 300M, new Neon SRT4, Grand Cherokee, PT crusier (you might not like the look, but it is nicely built), and the Prowler that just recently went off-line.

karl k

Looking forward to a PT Cruiser Coupe, 55 AMG for 2004 for $28,000.-!?

...assembled in Puebla, Mexico. Average wage $1.80 per hour.

Outland

MB will never be a bread and butter brand name. And since when are any of chrysler brands direct competition to MB? WHY would DCX choose to give up the billions in income that the Chrysler brands generate.

BTW, Plymouth ceased to exist a few years ago already.

Lockbuster

Chrysler would have been dead a long time ago if not for Mercedes bailing them out. As for the Chrysler products you see today are from an influence of Mercedes. That is why they seem to be getting better!

viper

Excuse me ? Take a trip to Germany. MB products are as plentiful as the Ford Focus is here. If MB wants to survive they have to be a bread and butter name. The competition from Japan has made this imperative. And I believe Plymouth is still a brand in Canada just like Ford Mercury is gone from Canada but exists in the United States.

David N.

I agree. I went all over Eeurope this Summer, and I saw countless MB's. Only in NA is MB considered a car for "rich" people. In Eeurope, MB is a car for all people. The A-Class is as common as cavaliers are here. E classes with cloth interior are also the norm. MB can be a "bread and butter" company in NA. They have the products to do it.

DCXdynodog

And exactly how would you know this?

You work there?

Your name is Kerkorian?

I think not.