Saving a 'merger of equals'
C.D. SIX
Wednesday, December 13, 2000
When Lee Iacocca convinced the government to save Chrysler, had the government known in just a short 15 to 20 years the automaker would be sold to Daimler-Benz in what everyone knew would never be a marriage of equals, they never would have saved the company.
Iacocca would go on to save the company again, this time from himself, and Chrysler would enjoy a renaissance in the automotive industry.
Overtaxed K-cars, which had once saved the company from rusting hulks like the Aspen, Volare and Valiant, were finally phased out and replaced by some of the most innovative products on the automotive scene.
Like swashbucklers from Detroit, Iacocca's team of Bobs Eaton and Lutz, Francois Castaing, designer Tom Gale and the rest turned out cars which set benchmarks - the LH cars, the new minivans, the Jeeps and pickups.
Then, two years ago, Jurgen Schrempp, current CEO of DaimlerChrysler, convinced Chrysler's management team, then heading one of the premier companies in the world, to sell.
What has followed has been two years of German mismanagement, the elimination of the company's American officers, and the dismantling of the team that put all of those new products on the board.
Schrempp bragging that he lied to Chrysler when he told them it would be a "merger of equals." Charges in the German press that Schrempp's "untruthful declarations" have damaged confidence in German management around the world. An $8 million lawsuit from shareholder Kirk Krekorian claiming that Schrempp is guilty of deception.
Schrempp just fired his third American president in the past two years and replaced him with a German.
Now Gale is retiring, and he is the last of the old guard.
The result? Sales are dangerously collapsing and investors are warning anyone within earshot to stay away. DaimlerChrysler is proposing a series of Band-Aids, reducing leasing dependence, delaying products and sharing components.
What the Germans do not seem to understand is what made America believe in Chrysler. The innovations, the underdog status, that was what America believed in. While the old team designed cars that would push the envelope, the Daimler boys have let the competition catch up. It was the people who instilled the passion in the company, and made it work, and those people have been phased out.
Since Daimler has taken over, not one concept has been approved for production. The last one, the PT Cruiser, was approved by the old management. While the public screams for 300 Hemi-C rear-wheel drive convertibles and the new Charger, Daimler is busy dragging its feet and killing off the Plymouth Prowler, and for that matter, the whole Plymouth marquee.
Granted, things have been tough in the over-extended automotive industry, and few have been immune. General Motors announced recently that it is phasing out its Oldsmobile nameplate and the Japanese, too, are struggling.
Granted, Chrysler, even at its best two years ago, had internal problems that needed to be addressed and haven't since the "merger."
But is this the result of American ingenuity? Is this the payoff for saving the company not once, but twice? To be sold when the price was good and exploited for what can be squeezed out, then sold by the buyers as an empty shell of what the company once was?
Is this the price we must pay for globalization? The shutting down of factories and the elimination of American jobs?
For this "merger" to work, DaimlerChrysler must alter its strategy. Schrempp must change his ways or go. Only by allowing Chrysler to work as an equal, not as a division, or by cutting it loose, can Chrysler survive. Install a leader who understands the American market for the company and what endeared it to the public, and perhaps the company can be saved.
But is that what Schrempp and DaimlerChrysler really want?
C.D. Six is The Mercury's Graphics Editor. E-mail him at cd_six@yahoo.com
C.D. SIX
Wednesday, December 13, 2000
When Lee Iacocca convinced the government to save Chrysler, had the government known in just a short 15 to 20 years the automaker would be sold to Daimler-Benz in what everyone knew would never be a marriage of equals, they never would have saved the company.
Iacocca would go on to save the company again, this time from himself, and Chrysler would enjoy a renaissance in the automotive industry.
Overtaxed K-cars, which had once saved the company from rusting hulks like the Aspen, Volare and Valiant, were finally phased out and replaced by some of the most innovative products on the automotive scene.
Like swashbucklers from Detroit, Iacocca's team of Bobs Eaton and Lutz, Francois Castaing, designer Tom Gale and the rest turned out cars which set benchmarks - the LH cars, the new minivans, the Jeeps and pickups.
Then, two years ago, Jurgen Schrempp, current CEO of DaimlerChrysler, convinced Chrysler's management team, then heading one of the premier companies in the world, to sell.
What has followed has been two years of German mismanagement, the elimination of the company's American officers, and the dismantling of the team that put all of those new products on the board.
Schrempp bragging that he lied to Chrysler when he told them it would be a "merger of equals." Charges in the German press that Schrempp's "untruthful declarations" have damaged confidence in German management around the world. An $8 million lawsuit from shareholder Kirk Krekorian claiming that Schrempp is guilty of deception.
Schrempp just fired his third American president in the past two years and replaced him with a German.
Now Gale is retiring, and he is the last of the old guard.
The result? Sales are dangerously collapsing and investors are warning anyone within earshot to stay away. DaimlerChrysler is proposing a series of Band-Aids, reducing leasing dependence, delaying products and sharing components.
What the Germans do not seem to understand is what made America believe in Chrysler. The innovations, the underdog status, that was what America believed in. While the old team designed cars that would push the envelope, the Daimler boys have let the competition catch up. It was the people who instilled the passion in the company, and made it work, and those people have been phased out.
Since Daimler has taken over, not one concept has been approved for production. The last one, the PT Cruiser, was approved by the old management. While the public screams for 300 Hemi-C rear-wheel drive convertibles and the new Charger, Daimler is busy dragging its feet and killing off the Plymouth Prowler, and for that matter, the whole Plymouth marquee.
Granted, things have been tough in the over-extended automotive industry, and few have been immune. General Motors announced recently that it is phasing out its Oldsmobile nameplate and the Japanese, too, are struggling.
Granted, Chrysler, even at its best two years ago, had internal problems that needed to be addressed and haven't since the "merger."
But is this the result of American ingenuity? Is this the payoff for saving the company not once, but twice? To be sold when the price was good and exploited for what can be squeezed out, then sold by the buyers as an empty shell of what the company once was?
Is this the price we must pay for globalization? The shutting down of factories and the elimination of American jobs?
For this "merger" to work, DaimlerChrysler must alter its strategy. Schrempp must change his ways or go. Only by allowing Chrysler to work as an equal, not as a division, or by cutting it loose, can Chrysler survive. Install a leader who understands the American market for the company and what endeared it to the public, and perhaps the company can be saved.
But is that what Schrempp and DaimlerChrysler really want?
C.D. Six is The Mercury's Graphics Editor. E-mail him at cd_six@yahoo.com