Sometimes things just don't work out." I remember HenryII saying that when he fired his president - and a very good man, too - Bunkie Knudsen. Remember that quote. I'll get back to it later.
Back on Sept. 2, my editor suggested I write this column on DaimlerChrysler. I wrote it Sept. 30, but you're not reading it until some time in November. I just want you to understand the time problem, because many things can happen in five weeks, especially at DaimlerChrysler.
And about that headline, "Occupied." It isn't nice and it isn't fair, but as my first wife used to tell me: "Fair only counts in hop-scotch, and close only counts in horseshoes."
I'm writing this piece for Juergen Schrempp to tell him how to solve hisproblem. My solution will be good for and good for Chrysler.
Juergen, an auto company is made of people and factories, and at Chrysler the people were terrific, and the factories were old. They used brilliant design and car-guy smarts to turn Chrysler into the exciting automaker that you brought into.
But that Chrysler is dead. The daring leadership that created that Chrysler is no more. Lee Iacocca is gone. Bob Lutz, our d'Artagnan, is gone, and so are his Musketeers. Francois Castaing, the engineer, is gone, Tom Stallkamp, the supplier guy, is gone. Of those heroes, only Tom Gale, the great designer, is still at Chrysler, and I don't know how long he will stay around.
So a new Chrysler is being built. But this new Chrysler is an unfinished story. It might be great, thanks to new people that I don't even know. Or it might be terrible. It's an unfinished story.
But, Juergen, you don't know how bad, really bad, Chrysler can be. You never drove a Dodge Spirit or Aspen or the Rampage. You never watched them rust, or, as one Chrysler executive said to me, "heard them in your garage." And you don't know how much money Chrysler can lose when it's bad. Billions, Juergen, billions.
Here's something else, Juergen. People who believe they've been betrayed, sold out for money, cheated, or taken over by trick or force, or feel that they are part of an occupied nation (like Occupied Chrysler), they don't work very hard, Juergen. They don't do their best. They get sullen. And sooner or later, you'll have a resistance. Some patriot will slip down an empty hall, pull a paint can and a big brush from his briefcase, and paint a big V on a wall in the Auburn Hills headquarters. How would you like to see that photo in Der Spiegel?
You won't notice the sickness at Chrysler at first. You've got two to three years of good products coming yet, winners: the four-door Dakota pickup this winter, the PT Cruiser next spring, the new Jeep Cherokee coming from the new plant in Toledo early in 2001 (the last of the Bob Lutz-gang vehicles), and the new Ram pickup. But after five years, you could have the real old Chrysler back, the Chrysler of the Dodge Spirit, Aspen, Rampage and multi-billion dollar losses per year.
One more little thing: Your stock is going nowhere - it's at the merger price as I write this - and Americans, who owned 45% or so of the combined companies at first, are bailing out. This keeps a downward pressure on the stock price, too. Not good.
You've got two choices:
1. Change your ways. Make DaimlerChrysler a true partnership. You'll have to prove it to the Americans with some dramatic gesture. You could replace one Mercedes man on your board of management with a Chrysler man. That would give Chrysler men the majority. Or you could name a Chrysler man as your successor. Or you could move your personal headquarters to Auburn Hills. If you don't like those, think of something yourself. But do something dramatic to win our hearts and minds.
If you don't want to do this:
2. Undo the merger. Free us. Sell Chrysler. You could probably get $40 billion for Chrysler. That would make you look good in Germany: $40 billion in the bank. You'll be a hero. Privatize Chrysler with money from rich Americans who want to see our flag waving over Chrysler again, Warren Buffet, Bill Gates, Kirk Kerkorian ... ah, maybe not Kirk. They could raise much of the money, probably borrow $10 billion more, and IPO the remainder. If you don't like that idea, ask Goldman. But the breakup should be easy. Nothing's really been put together.
Plenty of Americans would be willing to put up money. Rich guys always want to own auto companies. They are better than football teams. And a free Chrysler is hot, earning $3 billion to $4 billion a year. Free, this company could be worth $100 a share.
Remember Juergen, free Chry-sler now and you can get $40 billion for it. If you wait five years until the bottom's fallen out, you'll lose your lederhosen.
That's the advice:
Change your ways. End the occupation. Make Chrysler a true partner or free us.
And if you let our people go, use those words of HenryII: "Things just didn't work out." o
- Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.