FRANKFURT, Germany (Reuters) - The chief of DaimlerChrysler, which just days ago announced the biggest recall in its history, says the company made mistakes in its supply management, a German magazine reports.
CEO Juergen Schrempp told Der Spiegel magazine that "it was wrong to rely fully and completely on system suppliers who supply a complete navigation system or an engine management system."
Daimler last week recalled 1.3 million Mercedes vehicles.
In the interview, Schrempp said Chrysler chief Dieter Zetsche's opposition to his plan to keep a financial lifeline open for Mitsubishi does not mean Zetsche cannot become his successor.
"That is complete nonsense," Schrempp said, when asked that many people think Zetsche has no chance to become CEO because they disagreed on Mitsubishi.
"It's not the style of this company or mine that the decisions made in certain committees have any sort of relevance on the career of a management board member."
Zetsche opposed Schrempp's lobbying to keep providing money for Japanese ally Mitsubishi Motors. Daimler's board cut off additional financial support for Mitsubishi in April 2004.
Schrempp, who once again defended his record as chief executive despite the billions lost in restructuring Chrysler and Mitsubishi, said that under his reign shareholders have received an total return of about 6 percent annually.
Last week, Daimler said it will spend up to 1.2 billion euros in 2005 to revamp its ailing Smart car brand.
Personally, I believe this is MBZ's biggest problem; that is, losing quality control by relying too much on outsourced suppliers. I was invited to participate in a forum last week where M-Class owners were interviewed for an MBZ video production to be used to train its suppliers on why quality is important. I was quite surprised at some of the questions I was asked as they definitely were soliciting negative feedback. I guess it's a good sign that they realize there is a problem.
There is no inherent problem in quality control due to outsourcing.
It's a question of monitoring and testing all the process, systems and components that are outsourced. This is called quality assurance and is key regardless of who is making the components.
That is a good sign indeed. Still "blaming" other providers for YOUR quality problems isn't appropriate and still is worrisome. When you buy a system from someone else, it's ultimately your responsibility and your problem if there's something wrong with it...
It will take years to undo the damage started with the M class quality problems and then worsened with the C class cars. Don't even get me started on recent S class problems. With BMW cornering (inadvertent pun) the performance market and Lexus the price/value market all MBZ has at this time is the fading luster of the 3 pointed star. Their market at this time seems to be those for whom money is no object (S class) and upscale wannabes (M and C class). Before the merger I predicted Chrysler quality and MBZ design, sadly that has come to pass.
OK, so let me get this straight. You say the quality decline began with the M-Class and that you predicted quality would decline with the Chrysler buyout? So you must also have predicted the Chrysler buyout since the M-Class was designed and built before that? Or are you saying that quality got worse with the M-Class and then worse again with the Chrysler buyout? And by the way, why would MBZ buying Chrysler cause a decline in quality since? It's not as if they have used *any* technology, people or processes from Chrysler in MBZ - it's just recently been the other way around.
I guess my belief is that MBZ at some time decided to move more to the model of designing and selling to a price point rather than building the car within reasonable design constrains and selling it for a price within those constraints. Most auto makers organize their business model around the price point now and MBZ probably needed to do it in order to survive. They just don't seem to do it as well as the competition.
But whatever. MBZ quality is what it is. And the market will decide. Howard
But, have they used product? I mean, just look at the new R-Class comming out. It smacks of Chrysler Pacifica. I am sure Mercedes will not use a Chrysler engine, would they?
A significant problem for mercedes quality is probably the blind ignorance of mercedes customers. This has allowed mercedes to make inferior quality products and sell them at a premium price.
Chrysler cars are actually of decent build quality these days, and they certainly could make an engine for future mercedes cars.
I own a 97 E320, bought new, touted by Consumers, et al, as 'recommended, above average reliability'. One article touted it as nearly perfect.... In time, we all know that has been incredibly wrong. Last year alone, I put nearly $8,000 in repairs: Tranny electronics (o ring went bad and a 't' fluid leak fried the electronics, also AC condenser went). My purchase was based on having the car for the long haul. Street value on this car is poor- however this is my mistake, no one else to blame. BTW, I no longer use MB service- my mechanic is an ex MB tech and only works on MB.
Anyone that buys one NOW, that's another story. Lease it, enjoy it, and walk away from it. Don't look back.
Same goes for my 98 ML320- (Hey, Rodney!). Rated great at first but over time, unreliable even with the Star Mark Warranty. Last month differential...
Every month brings with it something new with one car or the other.
My 02:
Shremmp's comments might ring true in terms of how well he's done for the stock holders, but that's got to catch up. He ought to approach the disgruntled customers he's screwed and offer some assistance in terms of discounted service or a discount towards a new MB. Wouldn't that show some good faith to his customers to win back some loyalty as well as possible new customers?
Once again, time will tell if it turns into either another Audi 5000....
The R-Class smacks of the Pacifica because there seems to be a demand for that type of vehicle, i.e. a touring wagon that seats six adults in luxurious comfort. MBZ has decided that they can make a profit by building such a vehicle. They probably will. While it's design isn't for everyone, just like with the CLS, or the CLK, or the C-Class coupe, there's a market for it. As for using a Chrysler engine or any Chrysler components, I doubt we would ever see that as it does not make sense in the market. I could see a future where MBZ and Chrysler jointly develop components (which in reality would probably mean MBZ designs them and they get built in Chrysler factories), but I do not see any valid business reason to use Chrysler components in a Mercedes-Benz vehicle.
I would definitely not use the dealership one the vehicle is out of warranty - on *any* brand. They are always overpriced and often don't have the expertise to solve uncommon problems.
The last ten or so cars we've driven have been lease. I bought my ML at the end of the lease last year because (1) I really like it and (2) I could not find anything suitable as a replacement. The Touareg was the closest consideration, but I'd never buy a first-year model of anything. I plan to hang onto the ML for at least another year or two. I plan to see how the new W164 fares, and also if VW gets their act together with the Touareg. Of course the next SUV will probably be driven by my wife, so who knows what she will want.
I'd be interested to hear what problems you are having. The usual pattern for the ML is that once the initial poor-quality outsourced parts were replaced with redesigned components, the vehicles seem to be very reliable in the long run. I know the last 20K miles on mine (2001 ML320) have been pretty much worry-free, but the first 35K miles were a bit rough. Of course one of my most serious problems turned out to be the dumbest thing; it sounded as if the suspension was falling apart, and it ended up being nothing more than a loose hood latch (you'd never believe how well that hood acts like a huge amplifier for sound).
Do you mean transfer case? Was it a leak, because that was a common problem and an easy fix. The other common transfer case problem is a lack of use of low range causing components atrophy (usually the shifting servo).
Keep in mind you are driving 8 and 9 year old vehicles. Parts will wear out (especially if you live in the snow belt with all that salt) and there will also be plenty of maintenance items, like MAF's, O2 sensors, etc. I know a failed transmission is not normal, but I believe you were just an unfortunate victim of a very unusual problem.
Assuming that everyone in the company is doing an adequate job, it means that the quality we get as customers is based on the profit point the shareholders require to let the CEO keep his job. In order to improve quality and maintain current profitability, it means raising prices. How much more are you willing to pay for that quality? 10%? 20%? I don't know what the right number is, but quality is not free. Also, you have to evaluate what you consider to be "quality". Is it fewer defects per thousand? Is it fewer defects per mile? Is it initial quality vs. longevity? It's not as simple as just saying that we demand higher quality. We have to define our expectations.
Personally, I see the later model MBZ vehicles as some of the most technologically complex, cutting-edge machines that have ever been subjected to the severe tortures of the road. My expectation of quality is that the vehicle requires a minor number of adjustments that are corrected the first time, and other than minor maintenance and the occasional part failure, the vehicle continues to function with the same level of safety and performance as it did when new for at least 200K miles or about 15 years. I would expect that within this time frame, that the overall maintenance cost of the vehicle would be less than 20% of its initial cost. To me, that is the definition of quality.
LOL! Speaking of Audi, my wife has an A6 and loves it. It has been for the most part, trouble-free in over 35K miles. Other than brake problems (which have been covered under warranty), my only big complaint is that the plastic components in the interior could be of better quality. We've had latches to break on the armrest storage cover, cupholder, and first aid kit cover.
I'm with you on first year models.. same went for my Volvo S80...same for dealership rates.. I'm here in NJ- we do get some snow and the roads are sanded.. not salted....
We bought the E at lease end because we loved it as well.. in the case of this car, was it the condenser/evaporator? The part behind the glove compartment, a know problem. The tranny problem is something else... an 'o' ring failed, fluid dripped into the control box.. (something along those lines)....computer problems, etc.
With the ML, the differential was whining and had to be replaced as well as ball joints, some other part that is part of the drive shaft which is supposed to turn.. etc..
I've had Volvo's (740's, 240's, 245's) as well as a Subaru GL, these 4 cars ran great with few, if any problems, other than brakes, regular maint., etc... all to about 150,000 miles - and 10+ years.....
These cars are at about 80k... it's not small stuff, it's major stuff that goes wrong. I have friends that have older MB's and none have the trouble I've had. It's a combination of new models along with late 90's vehicles, that seem to have hammered their reputation... it's sad, especially when you look down the driveway, like I do...
That's the evaporator, and yes, it sounds familiar as that having been a common problem.
I'm, not aware of this being a common problem. As unfortunate as it is, O-rings do fail sometimes. I would not consider that any sort of symptom of chronic quality problems. I would, however, consider the evaporator problem to be one.
I think what they replaced was the center differential, which was a known problem in early ML's. It was designed to provide a 50/50 torque split, which caused some noise and vibration, so it was revised for a 48/52 (or thereabouts) torque split. Rear ball joints were also a known issue. I am surprised your ML went 80K miles with these issues not having been resolved. These normally appeared well before the original 50K mile warranty.
The drive shaft problem is likely either the hanger bearing or universal joints, both of which *are* going to fail during the life of the vehicle, although 80K miles is a bit soon (I'd expect at least 100K miles of service from them).
They just don't have the "right" models. Older MBZ's were plagued with different problems. Door closers failing on the "S" models, vacuum leaks on the diesels, steering problems, suspension and rust problems. It just depends on the model.
I agree, but just in case you think is just MBZ, go take a visit on the BMW, Audi, or even the Lexus boards. All you hear about are problems! Why? Because you can only talk about how great your car is for so long before it gets boring! it's more interesting to talk about problems and how to solve them.
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