Final Inspection

So Why Not Chrysler?

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Call it a case of a lesson learned, or maybe it’s an indicator of a new level of desperation, but there’s a tinge of irony in the collaboration and equity-swapping deal between Daimler and Renault-Nissan.

Some of the same technology- and platform-sharing concepts that were such anathema to Mercedes in the DaimlerChrysler days and that might have made that ill-fated amalgam prosper now are a cornerstone to a new tie-up for the brand with a competitor out to eat its lunch.

Under the deal, Mercedes will share its 4- and 6-cyl. engines – including diesels – with Renault, plus co-develop small-car platforms for Renault, Nissan and Smart vehicles. There’s also potential for joining on commercial vans.

All that coupled with some shared purchasing and possibly joint manufacturing will save Daimler and Renault-Nissan roughly €2 billion ($2.6 billion) each over five years, executives say.

“There is very little cross consideration of customers,” Daimler CEO Dieter Zetsche says in explaining the strategy. “Our people are open to sharing information because they are not afraid they will see what they discussed earlier (on products) competing against their own products.”

Of course, that’s the way it was supposed to work with DaimlerChrysler. The myriad brands of Chrysler, Dodge, Jeep and Mercedes had no real overlap in the market, and the American arm’s strong reliance on U.S. sales and the German group’s more international positioning seemed to offer even more potential in the way of global growth.

But Mercedes officials weren’t very eager to share, and they couldn’t get their heads around the concept that even tiny Smart could benefit from co-development of platforms with the American arm.

Ultimately most of the professed synergies either failed to materialize or return big dividends. In the end, Chrysler was sold off to private-equity firm Cerberus and left nearly devoid of new product.

Funny, but the Renault tie-up is similar on many fronts with one big exception. Like Chrysler, Renault and Nissan are volume brands, so the fit from a platform-development and component-sharing point of view is neither better nor worse.

But unlike Chrysler, Renault and Nissan remain independent, free to take what they can get from Mercedes and use it against the German auto maker.

Mercedes’ fine modern diesels and upscale gasoline engines will look good under the hood of Nissan’s Infiniti-brand cars as they go head-to-head with Mercedes in the U.S. And they’ll work fine for Renault as it makes its move up the brand pricing-scale and chases some of Mercedes’ market share in Europe.

Zetsche says this tie-up will be much different than the one with Chrysler, and he is probably correct. Continued pressure to meet tough global fuel-economy standards and boost economies of scale to compete with the world’s biggest auto makers – including a growing Volkswagen right in its own backyard – is eroding the resistance movement at Mercedes. And in this arrangement, no one partner appears to have the upper hand.

Times change and so do people.

But if Daimler-Renault-Nissan can succeed, isn’t it possible, with a slightly different mindset, DaimlerChrysler might have worked out just fine after all?

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