6.1 Hemi Charger news.
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From: The Golden State
Originally posted by falchulk
They did not "buy" chrysler. As was stated, it was a "merger of equals". As a matter of fact, Chrysler was is charger for a while. They took over when the Chrysler stock took a dump and things were going bad.
They did not "buy" chrysler. As was stated, it was a "merger of equals". As a matter of fact, Chrysler was is charger for a while. They took over when the Chrysler stock took a dump and things were going bad.
1. Chrysler was on one hell of a roll when Mercedes BOUGHT Chrysler. Chrysler just set an all time record in 1996 of
over 2.4 million vehicles.
2. Chrysler had a record breaking 3rd quarter earnings of 680 million dollars in 1996. Chrysler was rolling in so much cash that they repurchased $452 million of its common stock!
3. In 1997, the final year of Chrysler's "independence" it bought back over $2 billion of it's own stock! Chrysler closed 1997 with $6.5 billion, new LH cars that were a early sales success, and was rumored to be intrested in buying Rover off of BMW.
To contrast that 6.5 billion the relatively small Chrysler Corperation made in 1997, consider GM made 6.7 and Ford made 6.9 billion (and Chrysler's earnings were down from 7.5 billion the previous year!!). Chrysler's fortunes was HARDLY in the tank when Mercedes began talks with Chrysler in January 1998!
4. The "Merger of equal" line was complete Bullsh*t:
"Moreover, Schrempp acknowledged in an interview with the Financial Times that he had planned to make Chrysler a division of the German-based auto giant.
"If I had gone and said Chrysler would be a division, everybody on their side would have said, 'There's no way we'll do a deal,' " Schrempp said in the interview published on Oct. 30, 2000. "But it's precisely what I wanted to do."
"If I had gone and said Chrysler would be a division, everybody on their side would have said, 'There's no way we'll do a deal,' " Schrempp said in the interview published on Oct. 30, 2000. "But it's precisely what I wanted to do."
5. Chrysler was sold on this "Merger of Equals" nonsense because Chrysler saw higher quality Mercedes components on their new upcoming RWD car line, and stocks going up even further. Once Mercedes purchased Chrysler & Bob Eaton retired, they went on a campaign to either buy off, fire, or drive off all of Chrysler's US senior management.
The 14-man board is now dominated by the Germans, an indication that the supposed merger between Daimler-Benz and Chrysler was, as critics said at the time, a takeover of the company.
Pawley was the first of several Chrysler representatives to leave the board, which at the time of the merger had voting membership split evenly between Daimler-Benz and Chrysler, each having eight representatives. As of Jan. 1, 2004, the board will consist of 10 Daimler representatives and one Chrysler representative.
The company agreed in August to pay $300 million to smaller Chrysler shareholders to resolve their claims that Daimler-Benz officials characterized the combination as a merger to win approval from U.S. regulators, investors and employees...
Since Nov. 1998, DaimlerChrysler officials have jettisoned eight former Chrysler executives from the board. As of next month, the 16-member board will have only one former Chrysler manager on it, he noted.
There hasn't been one American added to the board since 1998,'' Christensen said. DaimlerChrysler officials have said they haven't been able to find competent American replacements, he added. (!
)
...DaimlerChrysler Chief Executive Officer Juergen Schrempp planned from the beginning to take over Chrysler, Christensen said. The investor camouflaged his intentions to make the acquisition more palatable, Christensen said.
The lawyer cited an October 2000 interview that Schrempp did with the Financial Times in which he said he always intended to make Chrysler a unit of Daimler-Benz...
Since Nov. 1998, DaimlerChrysler officials have jettisoned eight former Chrysler executives from the board. As of next month, the 16-member board will have only one former Chrysler manager on it, he noted.
There hasn't been one American added to the board since 1998,'' Christensen said. DaimlerChrysler officials have said they haven't been able to find competent American replacements, he added. (!
)...DaimlerChrysler Chief Executive Officer Juergen Schrempp planned from the beginning to take over Chrysler, Christensen said. The investor camouflaged his intentions to make the acquisition more palatable, Christensen said.
The lawyer cited an October 2000 interview that Schrempp did with the Financial Times in which he said he always intended to make Chrysler a unit of Daimler-Benz...
James Holden, president and chief executive of Chrysler Group and one of the few North Americans left in the company's leadership, is set to step down this week to be replaced by the head of German parent DaimlerChrysler's truck and bus division...
The shake-up would mark the removal of one of the last vestiges of North American control at DaimlerChrysler. The company that emerged from the $38 billion buyout of the No. 3 U.S. carmaker by Germany's Daimler-Benz AG in 1998 was supposed to be controlled from both Stuttgart, Germany, and Chrysler's suburban Detroit headquarters. But Canadian Holden's departure apparently will leave only two North American executives, both executive vice presidents, on the 11-member executive board.
...Thomas Stallkamp, a 19-year Chrysler veteran who was widely credited with helping turn the company around before the merger, announced his departure as president of DaimlerChrysler in September 1999. Robert Eaton, who was co-chairman of the company and who helped negotiate the merger, retired in March.
...Thomas Gale, executive vice president in charge of product development and design who was credited with innovative design advances at Chrysler, announced his departure in September
The shake-up would mark the removal of one of the last vestiges of North American control at DaimlerChrysler. The company that emerged from the $38 billion buyout of the No. 3 U.S. carmaker by Germany's Daimler-Benz AG in 1998 was supposed to be controlled from both Stuttgart, Germany, and Chrysler's suburban Detroit headquarters. But Canadian Holden's departure apparently will leave only two North American executives, both executive vice presidents, on the 11-member executive board.
...Thomas Stallkamp, a 19-year Chrysler veteran who was widely credited with helping turn the company around before the merger, announced his departure as president of DaimlerChrysler in September 1999. Robert Eaton, who was co-chairman of the company and who helped negotiate the merger, retired in March.
...Thomas Gale, executive vice president in charge of product development and design who was credited with innovative design advances at Chrysler, announced his departure in September
So, in summary:
*Chrysler wan't in a slump when Mercedes Benz came calling. Chrysler was in the best financial position of any automaker, and in a phenominal position when you consider it's about half the size of Ford, and 1/4 the size of GM's US operations, yet sitting on just as much cash.
*Mercedes sold their takeover as a "Merger Of Equals", and Chrysler execs seeing either improved cars or higher stock prices swallowed it hook line and sinker, along with us stockholders.
*Once Mercedes got in, the went about pushing out Chrysler management, many under the guise of "underperformance". (Bob Lutz was smart... he bailed as soon as the ink was dry on the agreement). Mercedes' goal from the very begining was a takeover.
*"Recession proof" Chrysler, which in 1996, was set up to withstand a 20% drop in sales and still be profitable, and had enough money in the bank alone to nearly fund the replacement of every car they made at the time, became broke a few years later. The money dissappeared.
*Chrysler has been run from Germany since at least 2000, at which time, every new product Chrysler planned early in the decade that wasn't too far along in development (the Dodge Ram & the redone Neon to be exact) was blocked.
*Daimler enacted a campaign of laying off Chrysler's workforce at the 1st sign of any bad news. Pretty handy if you either don't plan on keeping an automotive brand, or intend to make it a small piece of your business.
*It wasn't till Daimler's actions on Chrysler went too far & began dragging Daimler to the bottom with them, did Daimler have their meetings early last year & was forced to reverse their strategy, and release money for new products.
So concludes this class on "DamilerChrysler, the Bad, the Worse, and finally the Turnaround" 101.
More stuff (scroll down to 4.1c):
http://216.109.117.135/search/cache?...yc=45027&icp=1
Last edited by guionM; Jun 30, 2004 at 12:19 PM.
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Here is a fact that you are not inlcuding.....Chrysler was in BIG trouble but began to emerge in 1995. The truth is that Chrysler stock began to plummet and the germans did take over around 1999 or 2000. They made the cuts they did to stop the bleeding. This is from memory so I aplogize if I am off by a year or so.
Registered User
Joined: Mar 2001
Posts: 13,713
From: The Golden State
Originally posted by falchulk
Here is a fact that you are not inlcuding.....Chrysler was in BIG trouble but began to emerge in 1995. The truth is that Chrysler stock began to plummet and the germans did take over around 1999 or 2000. They made the cuts they did to stop the bleeding. This is from memory so I aplogize if I am off by a year or so.
Here is a fact that you are not inlcuding.....Chrysler was in BIG trouble but began to emerge in 1995. The truth is that Chrysler stock began to plummet and the germans did take over around 1999 or 2000. They made the cuts they did to stop the bleeding. This is from memory so I aplogize if I am off by a year or so.
Chrysler cleared $3.7 billion in '94, a billion in '95, and a record $5.2 billion in 1999.
The following year, 2000, the year Daimler took over completely, 20% of Chrysler's workforce was layed off, Chrysler's top executives either decided to follow Bob Lutz & bail out or were fired (taking negotiated severence packages that totalled 1 billion dollars if they were forced out or fired by Daimler executives).
In all fairness, I believe Chrysler executives used the Daimler takeover to finance their retirement packages & be set for life. I also suspect they knew more than they let on about the takeover. Lutz left town before the ink was dry and the deal was signed (didn't want any part of what he saw coming, perhaps??), and all hell broke loose almost the moment CEO Bob Eaton walked out the door (with a $70 million thank you from Juergen Schrempp, who assumed control of Chrysler once Eaton retired).
Also, German executives are paid less than US executives, so in all honesty, that may also have a bearing.
http://waw.wardsauto.com/ar/auto_dai...sler_face_wide
But I believe alot of the problems were created or exagerated by the Daimler side as a pretense to push out the US management team in favor of their own, and there is still the question of where the money went & why (it was adsorbed into DaimlerChrysler & used elsewhere except Chrysler).
Daimler benz made 1.6 billion in 1996. Chrysler earned 7.5 billion that same year. Reminds me of that South Park episode where they watched an elephant mate with a pig. In this instance, seems the pig damn near killed the elephant in the process.
Last edited by guionM; Jun 30, 2004 at 04:22 PM.
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Joined: Feb 2002
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From: Houston, TX
I can't really remember too much about the past but what exactly in terms of either products or services allowed Chrysler to be minting with so much cash? Was there some great demand for a particualr line of vehicles or something.. I just can't recollect the products.. someone shed some light...
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