"But the Reality Was That We Couldn't Actually Achieve Global Integration Because It Was at Odds With the Image of Our Brands"

Jonny Lieberman
by Jonny Lieberman
but the reality was that we couldn t actually achieve global integration because it

No, we're not talking about Tony Romo and Jessica Simpson's impending breakup. We're quoting directly from the mustachioed horse's mouth. The headline my friends, is none other than Daimler CEO Dieter Zetsche (Dr. Z to you and me) discussing why the 1998 "merger of equals" between Mercedes-Benz and Chrysler failed so miserably. To refresh your memory (in case your life is filled with more interesting activities than watching the disintegration of poorly planned global corporations)… Daimler sold Chrysler for billions and billions less than they paid for it to a hedge fund last year. Our favorite David Cross-lookalike CEO was speaking to gathered business leaders at a symposium about "Global Capitalism, Local Values" trying to explain exactly what went so badly. He points to the level of cooperation between MB and Chrysler as being "less" than he would have liked. Dr. Z goes on to say that Daimler learned a valuable lesson. "It's fair to say that we overestimated the potential of passing leading-edge technology from Mercedes-Benz to Chrysler. Unlike premium brand customers, American volume brand customers are far too price-sensitive to absorb its cost." To which TTAC says, "Duh!" And of course, know thy brand.

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  • CarShark CarShark on May 16, 2008

    I still think the 300 and Charger were a good MCE away from remaining competent past their "grace period", if you will. I believe the 5-speed that ChryCo used to use was a Merc unit, so they'd have to pay royalties now. Fat chance, thanks to who owns them now. I don't think Mercedes ever realized how competitive things were between the mainstream brands. They never seemed to move that quickly, especially when it came to powertrains.

  • LXbuilder LXbuilder on May 17, 2008

    Don't forget that Chryslers 90's "Dream team" of leadership all hit the road in the first couple years after the "merger of equals". And those put in charge after them were in way over their collective heads.

  • INeon INeon on May 18, 2008

    Didn't Daimler also change software packages halfway through the development of the current product generation at Chrysler? Seems I've heard that is why there's a warmed-over Mitsu platform under everything that isn't a truck or old MB tech-- They scrapped the original designs and software, and had Chrysler start over.

  • Windswords Windswords on May 19, 2008

    Idiot. There was never any cooperation between them. None. Zip, zero, nada. If there had been, if Dumbler had a more open minded, all kind of good things could have happened. But it didn't. Absolute worst company to be bought out by. They never asked, what's Chrylser got that we could use/learn from? They never asked, what do we have that could help Chrysler? Instead they gave them a prev gen E class platform (that they charged royalties for I'm sure) even though Chrysler was well on it's way with it's own RWD platform (and thereby delaying the intro of the 300 and Charger by 1.5 years). At one time (pre Dumbler), Chrysler was one of the quickest to market automakers. They studied what Honda did to develope new models, combined that with lessons learned from their aquisition of AMC/Jeep and created platform teams that handled everything in developing a new vehicle. And mgt was not allowed to interfere and gum up the works. The result was cars developed faster for less cost. At one point I think they developed a car from scratch in 42 months. That's the real reason they made so much money in the 90's. The sales were very good, but the cost savings from their development process saved them big time $$. Of course Dumbler, instead of adapting it for Mercedes use, replaced it with their process and forced Chrysler to use Mercedes parts and consultants - for a fee of course. Could you imagine developing a new Mercedes for 10, 20, or even 30% cheaper than before but selling it for the same or more? They would be swimming in Euros right now.