AUBURN HILLS, MI – It will be at least five months before Chrysler LLC disentangles its financial arm from the machine that was DaimlerChrysler Financial Services, says the president and CEO of newly formed Chrysler Financial.
“We’re based on people and process and technology,” Paul E. Knauss tells Ward’s. “A big part of our business is the technology.”
The 1998 deal that spawned DaimlerChrysler AG integrated the information technology platforms used by the financial arms of Chrysler Corp. and Daimler-Benz, which became DaimlerChrysler Financial. This must now by undone because of Cerberus Capital Management LC’s Aug. 3 acquisition of a controlling interest in the Chrysler operations.
“The Mercedes piece will have to be migrated to a new platform,” Knauss says, referring to the brand that anchors DaimlerChrysler, so-named until a planned October shareholders meeting when it is expected to become Daimler AG.
Meanwhile, Mercedes business, which will be conducted under the name DCFS USA LLC until October, will use an IT platform that mirrors the one shared with Chrysler. Chrysler Financial will retain its existing platform for the foreseeable future.
Separation work started after the Cerberus deal was announced in May. “We’ll be into the first quarter of 2008” before the two operations are completely independent, Knauss says.
The separation process will be transparent to the customer, Knauss says. But expect Chrysler Financial to be more responsive, he adds, because it will be a smaller, more agile organization.
“You go and buy a car today, you fill out some paperwork, the paperwork floats around someplace else,” Knauss says. Buy a car after Chrysler Financial becomes independent, “and maybe that afternoon or early the next morning, you’ll be able to call and talk to somebody about your account.”
The churn at Chrysler officially began Monday when the auto maker announced Robert Nardelli had been named chairman and CEO. Tom LaSorda, who is named vice-chairman but retains his job as president, said he relinquished his role as CEO at the behest of Cerberus boss Stephen Feinberg.
Other changes saw the departure of Chief Operating Officer Eric Ridenour. His job will go unfilled, the auto maker says, while Ronald E. Kolka – who was Chrysler Group vice president-corporate finance under DC – is named chief financial officer.
