DaimlerChrysler may have gone overboard in keeping its brands separate. If the old Chrysler Corp. and the old Daimler-Benz have two separate, parallel organizations, why do they need to be combined in one company?
The North American brands - Chrysler, Dodge, Plymouth and Jeep - remain together in one group. Mercedes-Benz and Smart continue in another, and commercial trucks comprise the third. OK, the brands (and the main concern here is Mercedes) stay pure.
That can be good. Chairman Juergen Schrempp decided against forcing some kind of trans-Atlantic engineering organization, despite legitimate pressures to cut costs and achieve 'synergies.' The brands must remain true.
But here's the bad news for shareholders: The company remains largely a simple holding company for the former Daimler-Benz and Chrysler Corp. Savings will be minimal if operations remain separate.
Of course, DaimlerChrysler is creating one purchasing operation and slimming its supplier base, which will cut some costs. But how big a discount can you get when you buy a million units of one part for Chrysler and 100,000 of a separate part, specified by a Mercedes engineering team on another continent?
If the integration is now complete, as the company says, Wall Street is going to wonder where the magic is. Meanwhile, President Tom Stallkamp, who headed the integration effort, is leaving at the end of the year. The American operations that used to be Chrysler Corp. are a lot like Chrysler Corp., only without Stallkamp and several other brilliant executives.
Schrempp's challenge now is to coax teamwork, growth and cost savings from the separate organizational 'chimneys.' This comes while other automakers (including the former Chrysler Corp.) have been burning down the chimneys so all parts of the company benefit from the others.