ST GALLEN, Switzerland -- Daimler CEO Dieter Zetsche today said the German automaker learned a lesson about the limits of globalization during its ill-fated ownership of Chrysler.
Zetsche said Daimler’s 1998 merger with the U.S. automaker created a globally integrated enterprise covering the auto market from the volume to premium segments and made perfect sense in theory.
“But the reality was that we couldn’t actually achieve global integration because it was at odds with the image of our brands, the preferences of our customers, and many other success factors -- all of which were far more diverse and fragmented,” Zetsche said.
He was speaking at the St. Gallen Symposium, an annual gathering of business leaders and policy makers here. The symposium’s topic this year is “Global Capitalism, Local Values.”
Zetsche said that the level of cooperation between Daimler, which owns the Mercedes-Benz luxury brand, and Chrysler was less than Daimler originally expected.
And, unlike Mercedes-Benz, which has a strong global reputation, the Chrysler and Dodge brands were strong in North America, but not in other regions.
“It’s fair to say that we overestimated the potential of passing leading-edge technology from Mercedes-Benz to Chrysler. Unlike premium brand customers, American volume brand customers are far too price-sensitive to absorb its cost,” Zetsche said.
“In the final analysis, we learned a practical lesson about the limits of globalization,” Zetsche told the gathering.
Last year, Daimler sold an 80.1 percent stake of Chrysler to private equity firm Cerberus for $7.4 billion, ending a nine-year investment in the money-losing U.S. automaker.
