Daimler Chrysler: Merger or Acquisition?

Published: 09th August 2011
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In 1998 Daimler-Benz along with the Chrysler Corporation tied the knot. The fresh produced DaimlerChrysler DCX conglomerate was touted in the company world as a merger of equals with both businesses retaining their one of a kind and unusual identities. Shortly after the merger the honeymoon period abruptly ended along with the rancor began. Diametrically opposite management and cultural differences helped with deep divisions which nearly scuttled the new relationship. Right now, items are much diverse than they had been in 1998; all the same it remains to be seen whether the lengthy term partnership between the German and American automakers will outlast the deep, mutual distrust that prevailed for so many years.

A changing global automobile marketplace throughout the final decade of the 20th century signaled the end of smaller, independent automakers. Though fairly massive in size, the Chrysler Corporation, which almost disappeared inside the early 1980s, was once more nearing a crisis point: a rapidly changing market meant that large measures of money could be required to keep their item line current as well as to take their product to emerging and lucrative new markets. In contrast to inside the early 1980s when the US federal government stepped in with a lot needed money, no government suitor was expected this occasion around. The lengthy term technique strongly suggested that the automaker would need to be acquired in order to survive. In stepped Daimler-Benz.

At the beginning, the merger was hailed as the offer of the century. The combined automakers, roughly the same size, swiftly turned into the fifth largest automaker globally. Combining German engineering - Mercedes becoming the principle small business - and North American marketing and advertising - the Jeep line as well as the Chrysler minivans being the biggest draw - quite a few envisioned that the start up business would promptly capture a larger slice of the global marketplace. Regrettably, the dream was nearly scuttled and for the accompanying factors:

An American president of the Chrysler Group, Jim Holden, was superseded by a German appointee, Dieter Zetsche.This alter occurred as Chrysler was experiencing difficulty in the market; additional senior American personnel had also left and had been replaced by German executives too. Some felt that the Germans were imposing their will on the U.S citizens.

Billionaire shareholder Kirk Kerkorian who owned 36 million shares of Chrysler prior to the merger and now held considerable amount of shares of DCX stock, filed suit in 2000 alleging that particular Daimler-Benz officials has committed "fraud and deceit" in orchestrating the merger.

Adding fuel to the fire was the closing out of the Plymouth brand. Already suspect of German intentions and realizing full well that the "merger of equals" was, in point of fact, an acquisition of Chrysler by Daimler-Benz, the termination of the Plymouth brand escalated fears that the Chrysler Group would fade into the background.

Fortunately, time has eased a few of the friction along with the Chrysler Group called the part of DaimlerChrysler that was at one time the Chrysler Corporation has benefited from the merger in a few ways, including:

New Mercedes inspired items.The Chrysler Crossfire was the very first of several new Mercedes inspired products to uncover their way into the Chrysler Group. Made in Germany, the Crossfire is basically a rebadged Mercedes roadster, a model that the the surface of the line Chrysler division in no way had.

Strengthening of the Dodge name. Already a decent performer, the Dodge division has received various Mercedes M class inspired models such as the Magnum along with the Charger. The Viper has been redone, the Ram trucks updated, plus the Neon is in the act of being substituted. Dodge marketplace share is growing even inside the face of strong foreign competition.

Fresh blood for Jeep. An all new 7 passenger Commander has hit the streets and extra goods are being planned.

Likely, Mercedes would have survived without a merger, though Chrysler would not have. Overcoming strong cultural differences - German authoritarian vs. American creative imagination - has kept the company afloat. Some are crediting Zetsche's understanding of the American company and culture with easing tensions, thus permitting the businesses to benefit from what they have in frequent versus their differences.

Absolutely, the rancor that existed some years ago appears to have eased. For DCX to survive and grow a mutual trust and respect of German and American cultural differences and small business practices is needed. Without both, renewed hostilities will surface and potentially scuttle what is still perceived by lots of as to be a delicate company relationship.

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