Download - The Merger Between Daimler-Benz and Chrysler
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
1/12
Avram Liviu Rzvan
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
2/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
3/12
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
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
4/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
5/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
6/12
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
7/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
8/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
9/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
10/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
11/12
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.
-
8/12/2019 The Merger Between Daimler-Benz and Chrysler
12/12