DC's Stuttgart Team Faces Big Credibility Problems Schrempp's comments stack the deck against success Bobwas mad and he wanted to make sure we knew it: he harrumphed and sighed and rolled his eyes and made it as clear as he could that he thought we had a lot of nerve asking such a dumb, impudent outright rude question.
The DaimlerChrysler Co-Chairman "bristled" as they say, when we asked him a year ago ifreally wasn't just the U.S. marketing arm of the German company. Then the brow beating began:
"We've got a team of people here that design over half of the products of this new company, that manufacture over half the products, that procure over half the parts for half the products, sell over half the products and have three strong brands. That just sounds ridiculous to me," he told us, looking at us contemptuously.
Certainly we couldn't argue with those facts, and we dutifully quoted him verbatim in the magazine.
Six months earlier, before he was forced out, DC President Thomas T. Stallkamp also passionately defended the idea that the deal that formed DaimlerChrysler was a "merger of equals."
We asked him if perhaps it would have been better if the "merger of equals" thing hadn't been played up so much.
"No. No." he replied. "I think it was true, is true and will continue to be true that it's a merger of equals," he told us emphatically. "Remember, a merger of equals means that we brought two companies together with significant strengths, of almost equivalent size, strength and profitability."
Again, we couldn't argue with his facts.
The interview was part of a cover story we did in May 1999 titled "starts to overshadow in `merger of equals.'" After the issue came out a senior public relations staffer told me she thought the story was balanced but that the cover - which featured a Mercedes star overshadowing a Chrysler badge - was unfair editorializing.
Then suddenly Chrysler's fortunes take a turn for the worse: It loses over a half billion dollars in the third quarter, and the next few quarters don't look so hot, either.
And then DC Chairman Juergen Schrempp comes out and says that the "merger of equals" idea was all a sham. "If I had gone and said Chrysler would be a division, everybody on their side would have said there is no way we'll do a deal. But it's precisely what I wanted to do," he tells the Financial Times in an Oct. 30 interview.
And you wonder why journalists are cynical.
Some analysts speculate that Mr. Schrempp wasn't lying to Bob, Tom Stallkamp, and Chrysler's other 128,000 employees when he initially talked about the merger of equals, and that he was lying to the Financial Times in an effort to save face and lay the groundwork for a takeover of Chrysler by German executives.
Whatever the case, Mr. Schrempp and his entire management team now have a king-size credibility problem in North America.
In the Financial Times interview Mr. Schrempp describes himself as a "chess player" always several moves ahead of the competition. I can assure you that "chess player" is not a common adjective being used to describe Mr. Schrempp in Auburn Hills or the rest of the Chrysler organization these days.
When he was named CEO of ailingMotor Co. Ltd. last year, Carlos Ghosn was the ultimate outsider in Japan. Yet despite the fact he was an executive from , didn't speak much Japanese and was very un-Japanese in heritage and nationality, he is managing a spectacular turnaround at the company. After losing money in seven of the past eight years and seriously in debt, Nissan recently posted its best operating results in a decade.
Despite his reputation as a ruthless cost-cutter, those who have dealt with Mr. Ghosn in difficult discussions say he is easy to talk to: simple, direct, straightforward.
That's quite a contrast to Mr. Schrempp, who Chrysler employees now view as the opposite. Not a brilliant "chess player" but more like a guy who seduces young women with promises of love and marriage and then goes out and brags about his conquests to all his friends.
In our interview with Chrysler Group CEO James P. Holden before he was fired last month you could tell he was stunned and embarrassed by Mr. Schrempp's comments.
Perhaps on Wall Street, or among the ranks of the world's top executives, comments like Mr. Schrempp's are just dismissed with a wink and a nod, but not here on Main Street in the Midwest, and not in an economy where there are lots of good job opportunities outside Chrysler. Ironically,now is looking for 1,000 engineers to staff up for a coming new product blitz.
Dieter Zetsche, Wolfgang Bernhard and the rest of the German executives who will come in to turn around the Chrysler Group's withering fortunes are no doubt talented executives; unfortunately their boss seems to be doing his best to stack the deck against their success.