THEY'RE changing the guard at Chrysler again. Jim Holden, a bright, talented Auburn Hills executive, is out. Dieter Zetsche, a sharp Mercedes executive with American experience at Freightliner, was to be in as head of the Chrysler group.
And DaimlerChrysler Chairman Jurgen Schrempp keeps trying to cut his losses before even the most patient German banks and shareholders lose patience.
In 1998, this 'merger of equals' was announced. OK, so the 'merger' was a bit of a fraud. Three weeks ago, Schrempp told a Financial Times reporter that he never intended to merge Chrysler and Daimler-Benz. He knew that if he told Chrysler that it was destined to become a subsidiary of Daimler-Benz, Chrysler would never agree. But now, it's all part of DaimlerChrysler, and the company has lost half of what each side was worth before. And it has more on its plate than it seems to be able to manage.
It now has to worry about the recent acquisition of control of Mitsubishi Motors. Schrempp has said that he wants to model his Mitsubishi strategy on Renault's restructuring of Nissan. He had better remember that he doesn't have Carlos Ghosn working for him. That makes quite a difference.
I wouldn't want to be in Dieter Zetsche's shoes. Even though he has a record of success at Freightliner and Mercedes-Benz, it's simply not the same. He's going to work amid people who don't want him, and who don't believe anything he says. And he probably is going to have to bring some more executives from Stuttgart, which will compound his problems.
The real assets of a company are its people. At Chrysler, just about all the top people have gone, and many of the survivors are rapidly updating their resumes.
It's ironic that Daimler-Benz watched with glee as BMW struggled with Rover. After waiting too long, BMW finally cut its losses. Well, now it's BMW executives' turn to smile as they watch Daimler's fortunes sink beneath the sea. What goes around always seems to come around.
DaimlerChrysler is up to its neck in problems. Fortunately, Mercedes-Benz continues to shine. But now the parent company will have to fund its US subsidiary while figuring out what to do with Mitsubishi.
If ever there were a great case-study killing the urge to merge, it's this one. Harvard will be able to study this for years. Will Daimler do what BMW did with Rover? How bad does it have to get before Stuttgart cuts its losses and spins off Chrysler?