Back in 1998, experts called Daimler and Chrysler union union marriage in heaven. But in about ten years the ideal union reached a critical moment. How did the union hit the rocks?
On September 15, DaimlerChrysler AG CEO stunned the world, predicting a $ 1.5 billion loss in the third quarter for the Chrysler Group. Managers know that they are all in trouble, but no one ever thought how serious a problem could be.
After a series of profitable quarters, Chrysler collapsed inside. Its intermittent sales performance triggered Daimler’s decision to sell it before it overturns the entire company. Chrysler will be sold for $ 7.4 billion to Cerberus Capital Management private capital.
But with this decision, the pressure increased. He not only notes the failure of the merger, but also includes many other types of struggle. Stocks of unsold product lines were suffocated by dealers. In addition, negotiations on the company's new policy are choking. “It shows the problems of mergers of large companies,” said Willie Diez, head of the German automotive industry. “You have cultural differences. You have a problem who really runs the company. ”
In an interview with a number of people close to Daimler, to restore the main events that preceded the sale of Chrysler on May 14, most of them spoke on condition of anonymity.
When Zetsche became Daimler's CEO, no one thought he would sell Chrysler. Like power antennas, Zetsche was accused of effective Chrysler leadership to simplify the merger. But Zetsche was extremely disappointed in the lack of synergy between Chrysler mass-market cars and luxury lines built by Mercedes-Benz. As a result, Chrysler stocks became overblown, and strong incentives could not get cars out of the dealership lots. The September 15 warning raised concerns about Chrysler becoming a full-blown predicament.
People close to Zetsche said that he really believed that Daimler could become an integrated power plant if Mercedes and Chrysler shared more technical costs and more parts. He sought greater cooperation and initiated the development of common platforms for small and off-road vehicles. However, joint projects only emphasized the huge differences between Mercedes and Chrysler. While the engineers could team up, they could not change the fact that a small Mercedes was selling for double the price of a Chrysler CD.
Many Mercedes auto parts were too expensive to be part of the Chrysler car. However, Zatzsche insured. One of the German artists recalled that integration can work. “Thank you for your opinion,” Zetsche told him. "I have another, we will continue to cooperate."
While Daimler struggled to solve the Chrysler problem, shareholders quickly lost patience. Influential holders pressed Zetsche and Bodo Uebber, chief financial officer of DaimlerChrysler, to sell Chrysler. “Zetsche’s pressure comes from many different districts telling him that they fell ill before Chrysler died,” said John Lawson, a London-based analyst at Citigroup.
In private, Zetsche reinforced the pressure on Lasorda and his team. No one felt more pressure than Joe Eberhardt, the former head of Mercedes, who was in charge of Chrysler sales and marketing. Eberhardt pushed many Chrysler dealers with his autocratic style into the terrible summer of 2006. He resigned on December 5th.
Earlier this year, Zetsche thought the sale was the best option. “It took him some time to make this decision for Dimler and Chrysler to separate,” said a person close to Zetsche. Valentine's Day 2007 was supposed to mark a new launch for Chrysler simply because the marriage was officially sent for divorce.
