DaimlerChrysler Boss Promises a Good Year
Jürgen Schrempp wants to get down to business
In an interview published on Thursday, Jürgen Schrempp, the
DaimlerChrysler chief, vowed to get things under control at the troubled
company in 2005.
Jürgen Schrempp, the chief executive of DaimlerChrysler, has given
himself one year to get the troubled company under control. In an
interview published in the company's in-house magazine on Thursday,
Schrempp promised to turn things around in 2005.
"I'm not promising too much when I tell you that we will get a grip on
the challenges within a year," Schrempp said. "We will do everything
that is necessary to become number one again, we have to act and we must
In the past year, problems have plagued DaimlerChrysler, which includes
the Mercedes-Benz, Smart and Maybach brands. Particularly at Mercedes,
the poor reliability of some models helped contribute to an overall
third quarter drop in profits 62 percent, down to €304 million ($403
million), at the Mercedes Car Group (MCG).
Schrempp also conceded in the interview that overall operating profits
for the entire year might fall below expectations.
Many reasons for decline given
"We have analyzed the causes and problems, and we have prepared
corrective measures and solutions," said Schrempp. "We will work under a
great pressure to implement them."
Among the reasons for the profit decline, Schrempp sited decreased
consumer confidence resulting from reliability problems, the
introduction of new models, the rising cost of oil, the strong euro and
the continuing poor performance of the Smart brand.
But DaimlerChrysler was on the case, he stressed, pointing to a recent
"quality offensive" to address the reliability problems. He promised
Daimler would invest heavily to improve the quality of new models at
Mercedes, which have fallen from being one of the most reliable car
brands in surveys to one of the worst, and re-educate dealerships to
raise service standards.
Complex issues plague luxury giant
Like many German car makers, Mercedes has struggled in recent times. The
company stands at a crossroads, as increased competition from Japanese
competitors and the rising cost of "Made in Germany" produced luxury
vehicles has forced management to carefully consider the future.
In July, labor unrest and strikes were prompted by the management's
threat to move production of the new C-Class sedan to South Africa if
personal costs at the Sindelfingen factory were not cut by €500 million.
Though not directly mentioned in Schrempp's interview, ways to keep the
high cost of producing cars in Germany below the revenue threshold will
likely be another issue in 2005.
DW staff (ziw)
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