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DaimlerChrysler's Schrempp adds sad chapter to biography of a global giant
By Daniel Howes / The Detroit News

FRANKFURT, Germany--In the heady world of global CEOs, DaimlerChrysler AG Chairman Juergen Schrempp is in a class by himself.

As boss of Germany’s most august industrial company, he defends his “strategy” as if it’s an immutable law of nature. But it amounts to little more than a DaimlerChrysler careening from one crisis to another — first with Chrysler in Auburn Hills, then with reliability problems at Mercedes-Benz and now with Mitsubishi Motors Corp. in Japan.

For that, he gets a three-year contract extension to 2008 (a renewal that came about six months earlier than is customary in German business). Just about any other automotive CEO in any other country would have been shown the door.

Conventional wisdom on the American side of the Atlantic holds that such coziness is still typical of German business. It isn’t, witness the shakeups a few years back at BMW AG or abrupt resignation of Siemens AG’s chairman.

But standing by the CEO — despite the Kerkorian show trial, the uncertain revival of Chrysler, the troubles at Mercedes and farce at Mitsubishi — is definitely how DaimlerChrysler under Schrempp and his protector, Supervisory Board Chairman Hilmar Kopper, works.

For them, results are less important than ultimate vindication of a strategy that looks great on paper. Yet it’s been mostly a disaster of implementation, a destroyer of shareholder value and a figurative black eye for German business.

For Schrempp and Kopper, if vindication comes long after Kopper leaves the governing supervisory board under mandatory retirement in 2006 and Schrempp follows, well, then, who cares? And if it never comes — it’s not their problem.

The arrogance of it all is stunning. And continuing.

To prove them right and the rest of us wrong, Herr Schrempp is fixing to pump billions more into a weak, confused, scandal-ridden Mitsubishi. The rescue package, expected to be discussed as early as Monday by DaimlerChrysler’s management board, likely will culminate with DaimlerChrysler owning a majority stake in Mitsubishi.

I think they call that throwing good money after bad.

Look, global automakers able to leverage economies of scale from operations around the world will be the fiercest competitors in the coming years. Toyota heads the list, followed by General Motors, Ford Motor, Renault-Nissan and Volkswagen.

There’s also ample evidence that the most successful and profitable automakers are the ones whose management and product lines are focused on a core business: BMW, PSA Peugeot Citroen, Honda.

DaimlerChrysler is none of those.

Even the troubled global players like GM and Ford are getting their collective arms around their problems faster than DaimlerChrysler.

Chrysler slumped before Ford in North America, but which one is making more money in the United States? (Ford). Mercedes claims a sterling reputation for reliability, but whose luxury brands are outscoring them routinely? (GM and Ford).

Some legacy. Schrempp will do what he’ll do with Mitsubishi and leave when he and Kopper decide it’s time, but that doesn’t change the central question about Schrempp’s tenure: Why is he still here?

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Discussion Starter · #2 ·
Some commentary:

Juergen Schrempp is to Daimler-Benz/DaimlerChrysler as Roger Smith is to GM. This man has single-handedly tarnished the legendary names of Mercedes-Benz and Chrysler--an amazing feat considering how both have survived very difficult times over very long histories.

Mercedes-Benz has managed to thrive through two world wars (on the losing side of both!), and is widely regarded as the oldest existing automaker. Chrysler survived two near-collapses in the early 1980's and 1990's, along with a struggle for survival in the shadow of GM and FoMoCo over its lifetime.

All that history. All of that survival. And one man, Juergen Shrempp, figures out how to unravel the seemingly invincible Mercedes mystique and how to simultaneously remake Chrysler into something respectable while undermining its chances for success.

This man is a disaster for both great marques. Will someone on the DC Board of Directors please, PLEASE, stand up to this guy? :angry:
 

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Originally posted by markform@Apr 19 2004, 03:02 AM
Mercedes buying Chrysler was the dumbest move ever made.

The need to do what BMW did with Rover.....sell Chrysler.  MB knows little about the middle market, and using a loser brand like Chrysler to go against GM, Ford and Toyota means waging an uphill battle for several years.  As a result, they have to divert resources away from their Mercedes luxury stronghold.  It would be easier to come out with their own moderately priced line of vehicles, under another name.

I forget how to say "stupid" in German, but somebody at DCX needs to start using that word at board meetings.
IMO, the Mercedes marque is getting to be as riddled with holes as Chrysler. Also, Chrysler was doing okay by the time of the buyout, but years of delayed new product introductions caused their downfall. The Germans wonder why Chrysler continues to lose market share? You can't leave cars the same forever (GM tried that already in the 80s) nor can you tell people in the middle market what they want, like you can get away with in the luxury market. Unfortunately, selling Chrysler to an independent group (a la BMW with MG-Rover) is not probable due to the size of Chrysler. You'll probably see another company grab ahold of Chrysler and slowly kill them. It's sad, I think this merger has been a disaster. BTW, I heard on Allpar that they are considering bringing back either Eagle or Plymouth to backfill where Dodge and Chrysler are backing away from (entry & lower-middle market). I dont know what they think is gonna happen there...
 

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Chrysler was weakened but it was done under the control of MB. Prior to that, Chrysler had crawled from under an almost chapter 11 and starte to produce cars that the public wanted. Notably the minivans. If left alone, Chrysler would have continued to be aggressive and would have debuted a stronger line up of vehicles than it has.
A buyout by an independent group would more than likely hobble Chrysler with a huge interest that would slowly cripple the company.
 

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Originally posted by coolcaddy@Apr 19 2004, 05:21 AM
Some commentary:

Juergen Schrempp is to Daimler-Benz/DaimlerChrysler as Roger Smith is to GM. This man has single-handedly tarnished the legendary names of Mercedes-Benz and Chrysler--an amazing feat considering how both have survived very difficult times over very long histories.

Mercedes-Benz has managed to thrive through two world wars (on the losing side of both!), and is widely regarded as the oldest existing automaker. Chrysler survived two near-collapses in the early 1980's and 1990's, along with a struggle for survival in the shadow of GM and FoMoCo over its lifetime.

All that history. All of that survival. And one man, Juergen Shrempp, figures out how to unravel the seemingly invincible Mercedes mystique and how to simultaneously remake Chrysler into something respectable while undermining its chances for success.

This man is a disaster for both great marques. Will someone on the DC Board of Directors please, PLEASE, stand up to this guy? :angry:
Amen.
 

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The merger is something of the past that would be dumb to break up now. Instead of injecting $7.5 billion into Mitsu, which has a tiny US market share, why don't they spend that money on Chrysler and MB making sure their products are kept up or maybe even ahead. It seems rather obvious to me. A lot more risk in putting the money in Mitsu with a lot less reward.
 

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Discussion Starter · #7 ·
I'd kinda' like to see Iacocca back in charge of a reconstituted Chrysler Corporation. I think there was an attempt to do that by Iaccoca and Kerkorian not so long ago.

Sure, it's a pipe dream, and I think Iacocca is pushing 150 years old by now; but having Chrysler Corp. back and allowing Mercedes to be Mercedes again sure sounds appealing to me.

Heck, I'd like to see Imperial make a comeback, but I realize saying such things puts me in the whacko category, so I'll keep it to myself...

... :rudolph:
 

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IMHO the key to Chrysler being a money maker is not pretending they're a full line maker, and instead doing what they do best which is go after niches with truely innovative products. I'd imagine all their important products: the minivans, the Wrangler, GC, 300, Ram, etc. are and/or will be money makers. It's thinking they have to come out with me-toos like the Intrepid and Sebring and Neon and Liberty that gets them into trouble.

Chrysler gives MB an entry into the sweetest parts of the North American market (e.g. full-size pickups, large sedans, minivans, etc.) if only they'd leave it at that.
 

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Originally posted by coolcaddy@Apr 19 2004, 05:35 PM
I'd kinda' like to see Iacocca back in charge of a reconstituted Chrysler Corporation. I think there was an attempt to do that by Iaccoca and Kerkorian not so long ago.

Sure, it's a pipe dream, and I think Iacocca is pushing 150 years old by now; but having Chrysler Corp. back and allowing Mercedes to be Mercedes again sure sounds appealing to me.

Heck, I'd like to see Imperial make a comeback, but I realize saying such things puts me in the whacko category, so I'll keep it to myself...

... :rudolph:
coolcaddy,

You're not the only one that thinks like that. :)
 
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