DaimlerChrysler AG expects to save $1.45 billion in '99

With shareholder approval behind it, DaimlerChrysler AG must now prove whether the merger is as solid in reality as it appears on paper.

Already, integration teams have found about 100 specific projects through which the new company expects to save at least $1.45 billion (DM2.5 billion) in 1999. That's a modest target considering that Ford Motor Co. and General Motors Corp. have beenlopping off between $3 billion and $4 billion in recent years.

With Mercedes-Benz's expertise in diesel engines well established, Chrysler will halt its own diesel program. Because Mercedes holds a stake in Ballard Power Systems Inc., a Canadian company pioneering work on fuel cells, Chrysler also will suspend its fuel cell work.

Magna International Inc., Chrysler's largest supplier and now the owner of its former Steyr-Daimler-Puch assembly plant in Graz, Austria, will build both the Mercedes-Benz M-class sport/utility vehicle and Chrysler's Jeep Grand Cherokee.

Discussions have been under way for weeks on how the partners can consolidate purchasing and leverage price reductions from suppliers.

One area where synergy will be particularly sensitive is design.

Neil Walling, director of Chrysler's exterior, minivan and car design. acknowledges a certain amount of anxiety about the merger among Chrysler's 350-member design staff.

"We will each keep our design identities," says Mr. Walling, "If you study other mergers, some companies found that very hard to do."