DaimlerChrysler AG Chairman Juergen Schrempp says the integration of the former Chrysler Corp. and Daimler-Benz AG is complete.
But last week's shake-up of the management board left the company organized much as it was on first day of the merger last November - except that many of Chrysler's top executives are gone. Americans will oversee the corporate division covering the Chrysler, Plymouth, Jeep and Dodge brands. Germans will be in charge of the Mercedes-Benz/Smart division and commercial trucks.
The 17-member DaimlerChrysler board of management was pared to 14, dropping two Americans and a German and elevating Chrysler sales chief Jim Holden, 48, to president of North American operations.
The most dramatic change was the departure of popular DaimlerChrysler Corp. President Tom Stallkamp, who was touted a year ago as a potential successor to Schrempp, 55. Stallkamp, 53, has been running the American operations and leading the integration effort. He briefly becomes vice chairman of North American operations but will leave the company on Dec. 31.
Just days before the merger last Nov. 17, Chrysler Chairman Robert Eaton had said he expected Stall-kamp or another Chrysler executive to succeed Schrempp as chairman of DaimlerChrysler.
NO HEIR APPARENT
Eaton will retire within two years. With Stallkamp gone, the power in the company is consolidated securely in Schrempp in Stuttgart, with no heir apparent.
Holden replaces Stallkamp as president of North American operations and remains on the management board.
Friday morning's announcement of the board changes ended a week in which the company's stock, already battered by disappointing second-quarter earnings, had slumped further. D/C stock has plummeted since its 52-week high of $108.63 in January. It closed up $2.13 Friday at $68.38.
News organizations reported widely last week that Stallkamp was out because he had disagreed openly with Schrempp on several strategic issues.
COMFORT VIA E-MAIL
On Friday, Stallkamp tried to quell fears by sending North American employees an e-mail message.
'I am convinced that this is the right path for DaimlerChrysler to take at this time,' Stallkamp said in his message. 'The company is now entering a new phase and with record sales, record profit levels, a new labor agreement in the U.S., and many synergies identified. We need to move on.'
Stallkamp said there is no rift in the German-American relationship.
Stallkamp loses his seat on the board. So does Ted Cunningham, 53, who was head of DaimlerChrysler Latin American sales and marketing and Chrysler truck operations. But Cunningham actually gets a more important job, as executive vice president of global sales and marketing for the Chrysler, Plymouth, Jeep and Dodge brands. He will report to Holden.
Stallkamp joins several top Chrysler executives in leaving the merged company. That group includes former manufacturing boss Dennis Pawley, now a consultant, and product-development chief Chris Theodore, who joined Ford Motor Co.
TURMOIL TOUGH ON STOCK
On Wall Street, analysts acknowledge that speculation on management changes hurt DaimlerChrysler stock.
But analysts say the emotional reactions will pass.
Scott Merlis, auto industry analyst for Wasserstein Perella Co. in New York, upgraded DaimlerChrysler Friday from 'hold' to a 'buy' with an $82-minimum price target soon after Eaton discussed the management changes with reporters.
'The cash flow is still going to be enormous despite the disappointing news of Tom Stallkamp leaving,' Merlis said. 'Extreme emotion often creates special buying opportunities in stocks, and I think we have such an opportunity before us.'
David Garrity, auto analyst with New York's Dresdner Kleinwort Benson, said it will take a while to recover investor confidence.
'Management's really going to have to show that this merger has worked,' Garrity said. 'At least up to now the numbers don't really seem to bear it out, despite all the protestations to the contrary.'
But Garrity likes DaimlerChrysler's decision to keep automotive operations in three separate divisions, with distinct brands.
Garrity noted Stallkamp's importance in the company's SCORE cost-reduction initiative with its suppliers. 'But I would argue that Gary Valade and Tom Sidlik were pretty much part of the same culture,' Garrity said.
Valade and Sidlik remain on the management board, responsible for global and North American purchasing, respectively.
Holden's strong relationships with U.S. dealers will serve him well, Garrity said.
Eaton, 59, said in a telephone news conference Friday that the restructuring 'will speed decisions considerably faster.' He acknowledged that public speculation about the management changes had hurt the company's stock price and employee morale.
'But as people understand where we are, the morale here will come back quickly,' Eaton said. 'The market will recognize these changes as a very positive thing.'