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Avram Liviu Rzvan

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Chrysler

Chrysler Corporation was representing in the 20th century the most

profitable vehicle producer (specialized in producing of heavy waist

sedans and light trucks) and a genuine Americansymbol.

This American company faced up the risk of producing some models like

Dodge Ram, Jeep Grand Cherokee or LH sedan series, which was

catching immediately the leaning of the customers all around the world.

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Year of 1997 represented for Chrysler the second year in

terms of sales, with over 2,8 millions units sold, a turnover of 61,1

milliard dollars and a profit of 4,7 milliard dollars.

In 1997, Chrysler reached to detain 23% of American market,

in terms of companies like Ford or General Motors, detained 6%

respectively 8% market quotation.

23%

6%

8%63%

The American marketChrysler

Ford

General Motors

Other

producers

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Daimler-BenzDaimler-Benz AG was representing in 1997 the biggest industrial group in

Germany. Known by the public as a luxury car producer, the German

company was operating in three different branches of affairs:

automotive, for passengers or goods and airships, with almost 300.000

employees.

The Mercedes-Benz and the Smart Cars division was global leader ofpremium cars segment. In 1997, Daimler-Benz reached the maximum

level of sales, on itswhole history, with 715.000 units sold and a record

of sales worth 30 milliard dollars, and a profit of 1,7 milliard dollars.

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The commercial cars division reached the level of sales at

417.000 units sold, and gains 21,7 milliard dollars from sales. Entirely,

in the year 1997, Daimler-Benz reached a profit of 2,4 milliard dollars

and a turnover of 68,9 milliard dollars.

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Daimler-Chrysler was forecasting benefits of 1,4 milliard

dollars by the exchange of technological components and capitalization

of the common distribution system.

The management team was expecting annual benefits of 3

milliard dollars, for the next 5 years, which was representing the up

trend to reach the top 3 automotive producers.

In 1997, this merger gains cash-flows of 12,7 milliard dollars

and put together 421.000 employees, and was presenting an up trend for

the near future.

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The downturn of Daimler-ChryslerWith a capitalization of 44 milliard dollars (almost the same with the

capitalization of Chrysler company, before the merger), after only three

years, Daimler-Chrysler was wrested from S&P 500 stock market.

The shares of Chrysler was waned to almost the third part of their before

the merger value.

In spite of this results, the Mercedes-Benz Smart cars Division, reached

profits of 830 million dollars in the third quarter of the year 2000, in the

same period of time, Chrysler record losses of 512 million dollars.

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The two companies were losing what they built in a couple of

decades.

Some declarations came from a few Daimler-Benz

shareholders, which sustained that they wouldnt ever drive an

American car, or the fact that Bob Lutz, the vice-president of Chrysler,

declared in public that Jeep Grand Cherokee can offer more satisfaction

to people then any Mercedes-Benz M Class, would cancel any hope

about this merger as been a success.

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The culture clash of the two groups didnt ever had the desired

positive effect. In the first stance, the Americans which concentrates to obtain

products with as low costs as it is possible, and for the second stance, the

Germans, which aims the quality, doesntmatter the costs.

The earnings differences between Germans and Americans was

huge. The German employees were paid four times better than Americans.The image of American people was characterized by excess and possessive

control, and the image of German people symbolized by strictness, seriousity

and quality, wouldntbe able to harmonize one with the other.

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Among 1998 and 2001, Chrysler company never have the

statute of an equal in this merger. After the leaving of the CEO Bob

Eaton, the German managerial implication came after 11 months. An

inopportune answer and very delayed.

A declaration came from the CEO Jurgen Schrempp should

reveal the real intents of this merger in point of the German company.

They want Chrysler as a subsidiary or Daimler-Chrysler in USA, and

their real need was obtaining qualified workers and an easy access on

the American market.

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