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Daimler-Chrysler Case Background In 1998 German Daimler-Benz and American Chrysler Corporation merged into what was referred to by Business Week as a marriage made in automotive heaven that is set to transform the way the auto industry operates worldwide The two companies announced it as a merger of equals This fusion of two of the worlds most profitable auto manufacturers was the largest industrial merger in history The new behemoths worth was estimated at 40 Billion and was expected to generate 130 Billion in annual revenue and employ over 400000 people Daimler-Chrysler Strengths DaimlerChrysler Jurgen SchremppBob Eaton German EngineersAmerican Marketing professionals Renowned as the planets premium luxury car makerWorlds most profitable and cost efficient car maker Class luxuryMass volume What went wrong oTransatlantic culture clash oChrysler dream team left the company Bob Lutz the man behind trendy designs and aggressive cost cutting was not given a role in DiamlerChrysler by Eaton thus Lutz left and a dozen key executives left with him As a result Chrysler lost its discipline and production costs increased oCEO Jim Holden and his team failed to anticipate the flagging popularity of its aging minivan line and the enormous demand for the PT Cruiser oLow cash reserves reserves would go as low as US 2billion oPost merger integration committee did not materialize oLost US512M its first in nine years oStock price dropped by half The original plans for a top-to-bottom merger of all Daimler and Chrysler operations were never realized Post merger integration committees were formed to work out details but this came to an abrupt halt after top sales executives argued that a complete merger would dilute the brand image of both Chrysler and Mercedes Analysis At first glance it would really seem that the merger was perfect The strategic international alliance formed by Daimler and Chrysler was expected to succeed because of the perfect fit of product lines
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