It has been a common sense of the world auto industry that DaimlerChrysler led by Chairman Jurugen Schrempp would lead the industry at the beginning of 21st century among existing six big manufacturers, namely General Motors, DaimlerChrysler, Ford, Volkswagen, Toyota and Honda, and also three independent makers such as BMW, Renault and Peugeot, as it has a tremendous fighting spirit. The company has been led by Schrempp's iron control and has developing varieties of high grade products which were backed up by its distinguished technology.
But DaimlerChrysler announced on October 26, 2000 its third quarter loss of 512,000,000 dollars. According to a report by Mr. Edmund L. Andrews with Keith Bradsher on New York Times November 28, 2000, as recently as October 25, Mr. Schrempp boasted in an interview with Automotive News that Daimler's committees of leading share holders was "convinced that what we're doing is perfect, what we're doing is excellent."
When Daimler Benz took over Chrysler, one of the big three American auto manufactures, in November, 1998, the industry people of world were surprised. In 1976, Lee Iacocca, a former president of Ford, was recruited to the president of Chrysler. Under his excellent leadership, the company was restored only for three years and he was promoted to the Chairman and CEO of Chrysler in 1979. He bought American Motors in 1987, a manufacturer of Jeep. He retired in 1992 after winning success and fame. He picked up Mr. Robert Eaton as his successor, who was transferred to Europe a few months earlier from the executive responsible for GM Technical Center in Warren for ten years. He was given enough budget for study and had about 10 thousand engineers, he did not get any distinguished result. Even at that time, not a few people expressed doubts on the new appointment. Mr. Schrempp succeeded in buying out Chrysler with back up from Deutsche Bank, a big share holder of Mercedes Bentz, and also with a help from Goldman Sachs, pretending as a "merger of equals" by negotiating with a weak boss, Mr. Eaton. But starting from Mr. Robert A. Lutz, a vice chairman of old Chrysler who contributed much to the renovation of company, Mr. Thomas Stallkamp, a former president, and almost all of top executives of old Chrysler such as Messrs Franz J. Castaing (chief engineer) and Dennis K. Pawley (executive vice president for manufacturing) left the company voluntarily or resigned by the pressure from top executives. Although only three years passed since the merger, as many as four presidents have been named, including Mr. Dieter Zettschesa, a right hand man of Mr. Schrempp, who replaced Mr. James P. Holden. He was forced to resign only fourteen months after taking the job, while Mr. Zettschesa fired three top executives right after his appointment. Due to the confusion between top executives, sales of their products became very slow. It had to sell products by cutting price four thousand dollars per vehicle and closed temporarily a few plants in order to reduce inventory (a new product, a retro style PT Cruiser, which was developed under the regime of Mr. Lutz, became a big hit so that the supply was much short from demands.) The successive big loss is expected for next year.
This is a symbolic affair how the international merger of auto manufacturers is difficult. The soft alliance introduced by GM's Chairman Mr, Jack Smith and its President Rick Wagoner worked well. The perfect control of Nissan by Mr. Gohn, a genius of business management, looked like success. But actually it was nothing but a dissolution of Nissan. Its superior engineering staffs are for Renault. The Nissan already faded away as an auto manufacturer Nissan.