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MiscellaneousDaimler and Chrysler Merger: What Went Wrong?
Posted by mike on 2007/4/12 7:38:00 (3201) reads

The Chicago Tribune has a fascinating article looking back to the merger of Daimler AG and Chrysler Group. Using 20/20 hindsight, the author of the article uncovers some clues that should have sent up some red flags.

"The Germans had no desire to work with the blue-collar American company and share things. The feeling of the Germans was that if you mix clean water with dirty water, you get dirtier water."

Indeed, part of Toyota Motor Co.'s success is its Lexus luxury brand shares vehicle platforms and components with the Toyota brand, lowering development costs and raising the quality of both. For example, the best-selling Lexus model, the ES 350, is derived from the Toyota Camry, and the two cars were designed simultaneously.

In contrast, Mercedes-Benz, the flagship brand of the company, kept its vehicle development largely separate from Chrysler's, and the two shared only parts, not designs.

"They just let Chrysler pretty much run as Chrysler," said Mike Parker, a skilled trades worker at Chrysler's Sterling Heights, Mich., plant. "There was very little difference in the plant (after the merger). In general, people in the know said there wasn't as much integration as they expected."

The most visible change on the assembly line was that more equipment, such as robots and conveyors, came from German-based companies.

"I don't think Daimler did good due diligence in the beginning or it would have seen that Chrysler's cycle plan was sparse on new product except for the [Chrysler 300] rear-drive sedan," said George Peterson, president of industry forecaster AutoPacific.

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Posted: 2007/5/16 8:12  Updated: 2007/5/28 3:18
Good site gays. Congrutalations!

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Posted: 2007/4/13 3:18  Updated: 2007/4/13 3:18
Just popping in
Joined: 2005/7/1
From: everett wa
Posts: 17
 Re: Daimler and Chrysler Merger: What Went Wrong?
Fourth, Mercedes would still be able to siphon off billions of dollars from Chrysler in the form of mandatory consulting fees and royalties, while benefitting from Chryslerís low-cost (compared to Mercedes) engineering excellence, economies of scale, and expertise in flexible manufacturing and larger vehicles.

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Posted: 2007/4/13 3:08  Updated: 2007/4/13 3:08
Just popping in
Joined: 2005/7/1
From: everett wa
Posts: 17
 Re: Daimler and Chrysler Merger: What Went Wrong?

Poster Thread
Posted: 2007/4/13 3:02  Updated: 2007/4/13 3:02
Just popping in
Joined: 2005/7/1
From: everett wa
Posts: 17
 Re: Daimler and Chrysler Merger: What Went Wrong?

Poster Thread
Posted: 2007/4/12 14:42  Updated: 2007/4/12 14:42
Not too shy to talk
Joined: 2005/12/28
From: Williamsport, PA
Posts: 37
 Re: Daimler and Chrysler Merger: What Went Wrong?
The article comes close to hitting the nail regarding the German owners.

They had no desire to work with Chrysler.

Remember, Chrysler had about $12 billion in the bank to offset the next downturn in the market.

The Germans took all of it.

Auto companies make good money from their finance arms. Chrysler was no different.

The Germans still take all of Chrysler Financial profits, making Chrysler look worse.

Flex platforms and new fuel-efficient vehicles are here and in the pipeline.

Chrysler's future is bright.

It will be better once it is independent again.

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Posted: 2007/4/12 13:15  Updated: 2007/4/12 13:18
Not too shy to talk
Joined: 2006/9/18
From: North Central Mass
Posts: 22
 Re: Daimler and Chrysler Merger: What Went Wrong?
this is a great article! one thing that sent up a red flag for me was the comment about chrysler being bought and then split up and having the seperate brands sold off again. it would seem to me that this would be disasterous if not fatal for the jeep brand. either one of "the big (two)" would buy jeep and disolve the jeep name and just make crappy "jeep"s under their brand(s) or a company that has absolutely no interest in making vehicles (let alone the most off-road capable vehicles) at all and just try to milk it for some more liquid cash on their balance sheet like AMF buying harley. when that happened, just the word Harley became a joke and the design and quality of the bikes suffered as a result. unfortunately there is no Jeep family waiting to make a night in shining armor move and to restore jeep to it's former glory after it was destroyed by whoever will buy it. what if GM or (the horror) Ford decided to buy the jeep name? sure they will hit us with a media blitz saying they "aren't going to change a thing" and "this will be the same old jeep" but how quickly will they change that after the "new wrangler" bubble bursts. i tremble for the future.

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Posted: 2007/4/12 15:25  Updated: 2007/4/12 15:25
Home away from home
Joined: 2005/10/8
From: NW Indiana, USA
Posts: 154
 Re: Daimler and Chrysler Merger: What Went Wrong?
A couple things to consider:

Ford and Jeep have a history of working together--think WW2 Jeep production. If I'm not mistaken, someone correct me if I'm wrong, but didn't Ford come up with the grill on the Jeep.

GM and Jeep have a history: Bob Lutz, head of GM, was head hancho at Jeep before his new gig. He is probably nashing his teeth trying to figure out to Wrangle(r) Jeep from Chrysler.
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