Juergen Schrempp made headlines in November when he told the Financial Times that he hid his true intentions from Chrysler Corp. executives during acquisition negotiations in 1998.
From the beginning, he wanted to make Chrysler a division of DaimlerChrysler AG. But if he revealed his intentions, Chrysler executives would not have agreed to the deal, he told the newspaper.
But a close reading of the transcript reveals an overlooked aspect of the story: Schrempp suggests that Bob Eaton, chairman of Chrysler Corp., was a party to the deception.
Here is what Schrempp told the Financial Times:
'When we sat in New York (in merger talks) we said you know, I mean for psychological reasons we need as many Americans as Germans on the board of management. We excluded activities Chrysler doesn't have like aerospace etc. and then we had equal representation. But it was clear to Bob Eaton (the former Chrysler chairman) and myself at the time this is what we call the start structure and then we would move eventually to what we have today.
'The problem is often (like this) for us when we do something like this. With Chrysler and former Daimler-Benz, at that time if I had gone out and said look, eventually Chrysler will be a division of the DaimlerChrysler group everybody (on their side) would have said no way we will do a deal like that.'
So was Eaton in on Schrempp's deception?
Eaton can best answer that question, but he declined to be interviewed last week.
Thomas Stallkamp, president of Chrysler Corp. during the merger talks, said Eaton believed in the merger of equals, with an integrated structure that included powerful Americans working in Stuttgart and powerful Germans in Auburn Hills.
'I honestly think he thought it could be a merger,' Stallkamp said last week. 'He was sincere that he wanted a plan for efficiencies' from combining the two companies.
'We talked about people moving back and forth across the Atlantic,' Stallkamp remembers.
Separate and unequal
But from the start, it was clear to Stallkamp that the Daimler-Benz people wanted separate business units.
Stallkamp was in charge of integrating the two companies after the acquisition. His integration team suggested having just one corporate head of government relations or of investor relations. The Daimler people always ended up insisting upon two - one German, one American.
Schrempp was certainly correct in telling the Financial Times that the deal wouldn't have been made if he had said Chrysler was to be a nonintegrated division.
In the merger negotiations, Daimler folks showed a chart listing Daimler-Benz's 22 business units and added Chrysler as the 23rd business unit. 'Clearly, we had discussions that it was not in our (Chrysler's) interest nor in DaimlerChrysler's interest that we become the 23rd business unit,' Stallkamp said.
By the time Stallkamp was fired in September 1999, the integration process had collapsed and the Chrysler executives' dreams of sharing engineers, parts and other resources had been dashed. Eaton left the company in March 2000.