Re: GM Using The Mercedes Playbook

He's CEO of Daimler as well as head of the Mercedes unit, so everything -- Mercedes, Maybach, trucks, smart, EADS, racing -- all fall under his direction.

Thanks. I did not check the facts. I thought that Zetsche had been promoted and, indeed, you confirmed it.

I suspect a number of people in North America do not understand the size of the Daimler AG (probably true of Europeans as well, but they will be well aware of lorries and buses, which are visible everywhere):

Also, people loosely use the names "Mercedes", "Benz", not always making clear to what they refer. I would mostly use "Mercedes" as shorthand, even when referring to the entire group, probably because all vehicles under the Daimler and Mercedes brand names carry the star, and the star = Mercedes in most people's minds.

DAS

I suspect a number of people in Europe do not understand the size of Chrysler in the late 90s and how PROFITABLE the company was.

In message , edward ohare writes

We know of complete firms owned by them that crashed, such as the "Rootes group"

Crashing a sick company is a lot different than crashing a healthy one.

It is most obvious that Chrysler's management in the 60s and 70s did not know what it needed to know to turn around junk companies selling cars sized for roads built for Roman chariots.

It is most obvious Mercedes management did not know what it needed to know to continue the success of a very successful company selling low and medium priced cars in the worlds largest auto market.

In message , edward ohare writes

Knowing about both Chrysler and Fiat, I believe it's a case of the blind leading the blind. If you Merkins buy Fiats, I'll know you don't recognise quality, even the Italians are avoiding them and their market share is continuing to drop. I'm happy to wait and see what happens.

Why would there be a question in your mind about whether we'd buy Fiats with a Chrysler or Dodge nameplate on them. We aren't buying Mitsubishis with Chrysler or Dodge nameplate on them.

Course, we're not buying any of the goofy stuff Jergen Schrempp etal came up with either. Which is the real point which you've dodged.

edward ohare schrieb:

It obviously didn't expect such a shortness in engineering skilled people. Sending German experts to develop Chrysler cars and combined global producing overstretched the companies ability to find sufficently many skilled engineers in Germany.

Btw the largest auto market is the EU. See eg

Mostly the US are an interesting market for foreign car manufacturers during periods with an overvalued US$ for luxury car exports or during periods of an undervalued US$ for shopping tours of stumbling companies.

Yea. Uh huh. The Germans showed up and decided the guys who made Chrysler shine in the late 90s were incompetent. They left. And what we see is the rsults of the German "experts".

Sorry, These guys should have stuck to expensive cars where their inefficiencies aren't evident.

Nice try. Chrysler was the most successful US company when Mercedes took over. The last of the Chrysler people's designs, the 00 - 04 models, would be more competitve TODAY in 2010 than what Mercedes came up with and what they're stuck with trying to sell.

Converting the bread and butter cars to rear wheel drive. Ignorant for that market segment. Coil springs on the big trucks. Why? Oh, yea, I know, better wheel location control but more expensive. And most importantly, better or not, NOT what truck buyers want. Anyone remember how much better Chevy did when they canned rear coils after

Oh, let's get rid of the Ram Van so we can ship kits to the US and Chrysler can build the Sprinter. Oh, yea, its OK for a city delivery van. But they gave up a chance at the people mover van market and the cutaway van market. Notice those U Haul etc trucks are built on a GM or Ford van now? No Sprinters there.

Chrysler got there first with the bigger small truck, the Dakota. GM and the imports are making bigger small trucks now. And the Dakota doesn't sell well anymore. First because its ugly. Second because they cut themselves out of the commerical market by not offering a work truck package or even a standard cab.

And then there's the product differentiation problem. Know when to make things different. So they took some vehicles styled as Jeeps, and stuck in a Dodge-ish grill. Sorry, doesn't get it.

But then the other side where the Dakota and Durango don't share front sheet metal any more. What's the deal there?

OMG, no one's building station wagons. We'll turn Dodge into a station wagon brand and get 100% of the market! Well, you know, there's a reaon no one builds station wagons, and what they were aiming for was 100% of almost nothing.

Mercedes make decisions the old Chrysler crew wouldn't have made if you held a gun to their heads. The only thing worse than having Schrempp and Zetske running Chrysler was having the ex Home Depot CEO running it. And I'm beginning to think even the people from Fiat might be an improvement.

In message , edward ohare writes

You obviously think you know best. Good luck to you,

You mean when I buy a Hyundai?

Mercedes has diesels and hybrids. Chrysler, well, they discontinued their only hybrids and diesels. The new Grand Cherokee is based on a Mercedes model.

Yeah, full-sized fwd. Check Impala sales? Pontiac G6? Oh, not around.

That's what is selling.

Better ride and handling. You know, things that people like. Things that got the Ram named MT Truck of the Year and winner of a C/D comparison.

So you're saying customers don't care about ride and handling?

Oh yeah, that 1970-era design Ram van was such a huge seller.

Notice how many delivery trucks (FedEx, etc) are Sprinters?

And what does that tell you?

No, heavy, inefficient, poor ride and handling, poor mileage, poor reliability.

And what would that be? The only platform in common is the Liberty/ Nitro, and the Nitro looks nothing like the Liberty.

Uh, you might have noticed, no Durango any more.

Just Subaru sells a ton of station wagons. Volvo, Audi, etc.

That rwd platform you think so little of is going to used by Fiat for the upscale Alfa-Romeo brand.

re

"Starting in 1998, troops of managers started flocking to Auburn Hills on a corporate jet. Soon the Germans discovered that Chrysler, which has a long history of boom-and-bust cycles, was in much worse shape than they anticipated. It spun deeply into crisis in 2000, racking up $4.7 billion in operating losses the following year alone. Mercedes had to make the ultimate sacrifice, squeezing its own costs to pump out better profits for the group."

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an opinion piece from the past........

Automotive News -- August 3, 1998 - 12:01 am ET d us a Letter to the Editor

THE PHRASE 'merger of equals' has just about disappeared from all references to DaimlerChrysler. Practically speaking, Daimler-Benz has swallowed Chrysler.

That settled, the House of Daimler is now getting lots of advice on how to domesticate the new division. Lately, the opinion givers all sound the same: Take firm and immediate control. Act like a senior partner. Give up the idea of two headquarters.

It may be time for a different voice, something along the lines of 'Let Chrysler be Chrysler.'

Bob Eaton wasn't kidding himself on 7 May in London when he called it a 'merger of equals.' Chrysler made twice as much money as Daimler last year on about the same amount of revenue.

Yes, BMW lost time by allowing Rover an early, unruly hands-off period. But every merger and acquisition is different. Each has its own set of rules. And this deal is like no other in the history of industry. Any industry.

Chrysler doesn't need to be digested. It needs to carry on as Chrysler, not turned into Mercedes-Benz of Michigan.

The textbooks say that can't work. Jeffrey Garten, dean of the Yale School of Management, says that unless Daimler imposes its culture on the new company and takes complete charge, 'don't be surprised if the deal fails.'

His textbook model? Japan's Sony Corp. gave too much control to reckless American managers when it bought CBS Records and Columbia Pictures in the late 1980s. A disaster resulted. Sony had to send in scores of Japanese executives to clean up the mess.

But comparing Bob Eaton and Tom Stallkamp to Peter Guber and Jon Peters, the wild-spending duo who ran Sony Pictures into the Hollywood turf, is like comparing Sense and Sensibility with Liar Liar.

Heeding the advice of Garten and others to act 'quickly and decisively' to integrate Chrysler could crash the merger on takeoff.

When a carmaker is acquired it is usually the brand that has to be carefully preserved. The corporate culture often has to be scrapped. But Chrysler's culture must be protected. Cherished, even.

General Motors still operates in the USA with more or less the same corporate mindset as in the 1950s. But Chrysler came up with an interesting recipe. Take what Bob Lutz saw in his early days at BMW, 30 parts; Bob Eaton's lessons from GM Europe's turnaround in the late 1980s, 30 parts; Francois Castaing's experiences as a young race-car engineer at Renault, 20 parts; Lee Iacocca's get-out-of-debt sense of urgency, 15 parts; Walter Chrysler's ancient antipathy to General Motors, which he quit in a huff in

It is a marvelous brew.

It would be easy for Daimler to impose itself on Chrysler, much harder to blend the two companies - saving the best of both. But that is the right recipe.

You can send an e-mail to Richard Johnson at: snipped-for-privacy@compuserve.com

Read more:

"Starting in 1998, troops of managers started flocking to Auburn Hills on a corporate jet. Soon the Germans discovered that Chrysler, which has a long history of boom-and-bust cycles, was in much worse shape than they anticipated. It spun deeply into crisis in 2000, racking up $4.7 billion in operating losses the following year alone. Mercedes had to make the ultimate sacrifice, squeezing its own costs to pump out better profits for the group."

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We have the trucks and buses here too.

In message , Matthew Russotto writes

They also happen to make rather good locomotive engines too.

As a general comment, I think the Daimler/Chrysler situation is not black or white, and various aspects have already been discussed by others. To me it always looked like a takeover of Chrysler and did not buy/understand the "merger of equals" talk.

Clearly DB bit off more that it could chew and, I believe, was run by megalomanic top management. I recall reading a respectable and founded opinion piece about the rush to get the new joint company registered on the NY stock exchange. A driving force for the German directors was to have justification to raise their salary levels to the then stratospheric American ones. No director of a German-listed company could ever have found support for this.

Regardless of the technical/mechanical arguments about technology transfer, quality of Chrysler car (selling maybe 2m p.a. against 1m Mercedes cars at the time of the fusion) and as a fan and long-term driver of Mercedes cars, I always thought the idea stupid, a diversion of management attention from the production of Merc-branded cars. Yes, maybe US sales growth was slow but it was manageable, and the quality issues in the US plant were eventually sorted out.

The corporation had already made ill-advised excursions into unrelated areas such as white goods (AEG kitchen equipment and the like, when AEG was losing money hand over fist, later divested), and into aerospace, also a hugely loss-making (and govt-subsidised) venture. The hypocrisy that the then management managed was breathtaking. After previously complaining about (German) govt subsidies going into other enterprises and how that should end, they went cap in hand to the (German govt) bleating about the need for subsidy.

This was quite a few years before the Chrysler fiasco and I thought that management had learned some lessons, but evidently not.

I have already expressed these opinions here before some time ago, but I thought them worth repeating as they are apposite to this discussion.

Furthermore, I could not see how Daimler Benz (as it was then called) could handle running a mid-market brand and an upmarket one (despite Merc having become 'mass market') under one roof. It is a trick that Volkswagen have pulled off but only after years (decades?) of careful nurturing of the Audi marque, which had and has been part of the corporation for decades. Downmarket/decrepit Skoda was acquired and integrated with great success but under special circumstances.

The Mercedes dealerships in Germany had real problems coming to terms with having Chrysler in the group.

DAS

To reply directly replace 'nospam' with 'schmetterling'

They should have studied BMW's purchase of a mass-market manufacturer, Rover, and all the problems that caused, such that BMW, I believe, sold it for the equivalent of one dollar just to get rid of it.

I read Chrysler first tried to interest Fiat in merging, but Fiat said no. Interesting, because back in the 70s, Iacocca also tried to get Fiat interested in a merger, and Fiat said no then too.