Facing a growing shareholder revolt on both sides of the Atlantic over his handling of the Chrysler takeover, DaimlerChrysler Chairman Juergen Schrempp last week won an important endorsement from his biggest and most important investor, Deutsche Bank.
'We are convinced that DaimlerChrysler management can handle the problem,' a spokesman for the big Frankfurt-based bank, which owns a 12 percent stake in DaimlerChrysler, said late last week.
That endorsement seems generous when measured against the bank's losses in the Chrysler group disaster. At last week's price of $38 a share for DaimlerChrysler stock, Deutsche Bank has lost $8.4 billion on the value of its investment since Jan. 6, 1999, when the stock peaked at $108.
Several factors explain the bank's patience, including its long ties to the former Daimler-Benz AG and the fact that its supervisory board chairman, Hilmar Kopper, also is chairman of the DaimlerChrysler supervisory board.
Kopper and Schrempp have worked together for years and are friends. Jim Collins, industry analyst for UBS Warburg in London, said: 'Schrempp's close relationship with Hilmar Kopper makes him not entirely untouchable, but much less touchable than someone else would be.'
Other shareholders, however, have become far less patient.
Billionaire financier Kirk Kerkorian filed a $9 billion suit that alleges securities fraud and seeks a breakup of the merger.
An influential shareholder rights group in Germany called late last week for Schrempp and Kopper to step down.
'One should look at what Schrempp told us about shareholder value when he started in his position,' said Markus Straub of the German Association for the Protection of Small Shareholders in a telephone interview. 'If you look at the situation now there is nothing left of his promises.'
Straub says Kopper is culpable because he has been an enthusiastic supporter of 'overambitious mergers' since Edzard Reuter, Schrempp's predecessor as CEO, over-reached on his attempt to reshape the former Daimler-Benz into a diversified conglomerate.
Ekkehard Wenger, a shareholder activist and economics professor at the University of Wurzburg in Germany, said the company should bring back Helmut Werner, the former chairman of Mercedes-Benz AG. Werner resigned after losing a 1996 power struggle with Schrempp. He opposed the merger of Mercedes-Benz AG into the larger Daimler-Benz conglomerate.