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Management > Other Independent Research > Daimler-Chrysler

 

Daimler-Chrysler

Daimler-Chrysler announced its first operating loss in 10 years (-$627m), which it is planning to resolve by consolidating Smart’s separate production lines. The Smart car has failed to make any sort of profit, as its design is unpopular.

However, Chrysler has been very successful overall, as it has been an early adopter to new management trends, such as JIT.

Dieter Zetsche is currently sorting out the company, trying to integrate the technical and engineering work behind the two very different brands of the company, but this has caused Mercedes to slip badly. Its reputation for quality as slipped and the Smart cars failed miserably.

The marriage of Daimler-Benz and Chrysler in 1998 was the biggest cross-border merger ever. Both successful car companies, this meant that they could cope better with the demands of globalisation, with regards to scale and scope. Without Chrysler, Mercedes would be confined to luxury cars and be threatened by other car makers, while without Daimler, Chrysler would have gone into liquidation.

Unfortunately it did not work out too well, as the share price of the new company fell from a peak of $108 in January 1999 to $38 by November 2000. The price today is still only half the level of its peak.

 

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 Copyright Heledd Straker 2006

Go placidly amid the noise and haste