The DaimlerChrysler Emulsion

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The DaimlerChrysler Emulsion
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The DaimlerChrysler Emulsion

• Cross-border deals
• Daimler-Benz, German most profitable car company
• Chrysler, USs big 3, most efficient
• Not only two different headquarters
• But two different cultures and different nations

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The DaimlerChrysler Emulsion

• At the beginning, no one paid much attention to
  the cross-border merger.
• Three big issues
• Industry consolidation
• No precedent and feasibility?
• Post-merger management

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Chrysler

• Not equal
• Daimler was calling the principal shots
• Sell-out to foreigners
• Different working styles

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Two Cultures, One Company

• Measures
• Reducing traveling time
• Lease office space
• Converted air craft
• Continued to expand
• Mitsubishi Motor, small car business
• 10 in Hyundai

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Two Years After Merger

• Two headquarters
• Merger is still being used
• Stock price ?40 from 106 in 1999

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Operational Problems

• Discontent
• Intensifying competition
• Bigger discount to dealers

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Two Sets of Problems

• Daimler was bureaucratic and formal, a lot of
  paper work
• Americans are more spontaneous, oral, and less
  paper work
• Americans are paid much more than the German
• Americans got rich because of stock options

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Two Sets of Problems

• Loss of talented staff
• Not to take peoples loyalty for granted
• Council of 5 senior managers to monitor all
  projects

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Cross-border Merger

• Not only on the operational parts, also on the
  cultural parts
• Synergy effects
• Coordination between new products