Schrempp next to go

  • Thread starter Thread starter Wayne Van Kirk
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It is an interesting article, even if there is nothing new in it.

Two comments:

1) I am always amused when people try to class Mercedes-Benz as a niche
manufacturer. With 1 m cars p.a. it is definitely in the mass-production
league already, certainly outside the US. (IIRC Chrysler makes 2.2 m cars
p.a. approx.)

Schrempp, I suppose, wanted a faster 'in' into the US car market, though
buying an existing manufacturer with a checkered financial record may be
more a matter of megalomania than good business sense.


2) Claiming that Ford's foray into the 'luxury' end by buying Jaguar is
similar to DB's purchase of Chrysler in the sense of combining 'mass' with
'luxury', then failing is, IMO, rubbish. Perhaps there IS a similarity.
Both (i.e. Ford and DB) bought a pig-in-a-poke.

Jag cars were terribly unreliable when Ford bought the company, made in an
outdated factory with outdated plant. Buying Jag was great for Jag; it's
just that the price paid by Ford was far too high. However, now we have a
decent car, but it took years and billions of dollars to get here. I have
no special insight but I wouldn't be surprised if there were many internal
debates at Ford to drop the enterprise.

DAS
 
It is an interesting article, even if there is nothing new in it.

Two comments:

1) I am always amused when people try to class Mercedes-Benz as a niche
manufacturer. With 1 m cars p.a. it is definitely in the mass-production
league already, certainly outside the US. (IIRC Chrysler makes 2.2 m cars
p.a. approx.)

Schrempp, I suppose, wanted a faster 'in' into the US car market, though
buying an existing manufacturer with a checkered financial record may be
more a matter of megalomania than good business sense.
Click to expand...

Still, wildly successful ones usually aren't for sale. And sometimes things
turn out right -- Renault's purchase of Nissan looks like a good move.
(Ironically, Schrempp wanted to buy it for DC, but the Chrysler people in DC
management opposed it, so DC bought Mitsubishi instead.)
2) Claiming that Ford's foray into the 'luxury' end by buying Jaguar is
similar to DB's purchase of Chrysler in the sense of combining 'mass' with
'luxury', then failing is, IMO, rubbish. Perhaps there IS a similarity.
Both (i.e. Ford and DB) bought a pig-in-a-poke.
Click to expand...

BMW's purchase of Rover comes closer.
 
Only in America has Mercedes cultivated that image. Everywhere else,
they're just as recognizable as taxicabs as were Checker Marathons and
Plymouth Gran Furies were in the US.
Click to expand...

But also recognizable as cars on a par with BMW, Audi, and Jaguar. Heck, in
most of the world, trucks with the 3-pointed star outnumber cars with it, but
the cars are still highly esteemed.

And thats not a BAD thing. Checker
Marathons, Plymouth Gran Furies, and Mercedes 200Ds were superbly rugged
cars.


I don't agree with the "checkerd financial record" part. Chrysler was in
an EXCELLENT financial position with a huge cash surplus,
Click to expand...


Not at the time of the merger, as the DB folks found out only after the
merger.
and had been
since the mid 80s. Remember, Iacocca paid back the guaranteed loans
YEARS ahead of schedule and the company never slowed down afterward.
Click to expand...

Sorry, it did. Their employees per car were higher than Ford or GM, as were
their man-hours per car and cost per car.

In
fact, it only gained momentum after Iacocca retired, allowing Bob Lutz
to abandon some of the overly-conservative engineering and styling that
Iacocca was still clinging to.

Daimler picked Chrysler for two reasons, and they were good ones on paper:

1) Chrysler engineering has always been among the best in the world.
Quality control has run the gamut from pitiful in the late 50s, superb
from roughly 62-74, back to horrendous from '77 through roughly 85, back
to great beginning in the 90s, but even then plagued by "spot problems"
like the 604 transmission... but basic ENGINEERING (separate and apart
from QA/QC) has never been topped by another American manufacturer, and
at best equalled by any other manufacturer, and made a great fit with
Mercedes, also known for superb engineering. The ideal "third leg" of
the triangle would have been Honda, if you ask me.

2) Chrysler's Auburn Hills design center was the most advanced in the
world, and promised to do GREAT things for Mercedes, which had slipped
way behind the times and had some of the longest design-to-production
times of any major player in the business.

Where any megalomania came in was thinking he could tell Americans that
it was a "merger" and instead perform a takeover. The bright engineers
and stylists left Chrysler in droves (with the exception of Jeep/Truck
Engineering group which has more or less been telling Schrempp to go get
bent and doing their own thing as if the takeover never happened.) With
the bright engineering gone, Merceces didn't benefit as intended and now
builds some of the worst vehicles it ever has.
Click to expand...

The cars "responsible" for the quality problems are the E-class introduced in
96, the first model to try to answer Lexus by building to a price instead of
letting engineers control things, and the M-class, the first SUV and first
model made in the US.

The Chrysler passenger
car divisions fared similarly, leaving only JTE as the engineering
leader.
Click to expand...

ohv IL-6 and solid axles? Are you kidding?

And great as JTE is, GM truck and Ford truck have always and
will always be larger- you can't hang ALL of DaimlerChrysler on the Jeep
Truck Engineering group and expect to live long.

All this is just my opinion, but the Bloomberg article (as usual) looks
only at business decisions and not at engineering. With an auto company,
business decisions are always secondary (in the long run) to engineering
even if they have a more immediate impact than engineering does.

And yeah, I think Schrempp is on his way out. And just MAYBE someone can
wrest Chrysler back away from Daimler and both companies can get back to
business.
Click to expand...
Daimler will not ditch ailing Chrysler
Sunday July 27, 12:57 pm ET


FRANKFURT, July 27 (Reuters) - German autos giant DaimlerChrysler AG
(XETRA:DCXGn.DE - News) remains committed to its ailing U.S. Chrysler unit and
has no intention of selling it, a company board member told a German
newspaper.

"Chrysler belongs to us, just like Mercedes-Benz," DaimlerChrysler board
member Ruediger Grube told Die Welt newspaper, according to an advance copy of
an article to be published on Monday.

"The strategy that DaimlerChrysler has been following since the 1998 merger
needs time, because we are dependent on the product cycles in the auto
industry," Grube was quoted as saying.

The world's fifth-biggest carmaker said last week its core profits sank by
nearly two thirds in the second quarter, hit by losses of 948 million euros
($1.1 billion) at Chrysler.

Chrysler's woes have fuelled questions about the strategic logic of its 1998
merger with Daimler-Benz, since when the group's stock has lost nearly three
quarters of its value.

Grube also said DaimlerChrysler was confident of sealing a planned trucks
joint venture with Korean manufacturer Hyundai Motor , with union negotiations
the final hurdle.

DaimlerChrysler planned to form a 400-million-euro joint venture in the first
half of 2003 with Hyundai, South Korea's top automaker, but tough labour
demands have been delaying the deal.
 
Curious to know where they went, if known? To the Big Two?

Another point: I am not so familiar with Chrysler US designs of, say, 10
years ago (don't see that many US cars in Europe, and I am excluding the
cars produced by Chrysler in Europe many years ago) but, in general, I can
say that in west-European eyes the 'ordinary' saloons/sedans in America did
not appear to be that good-looking on the whole. Recently I made a point of
going into a Chrysler showroom (in Germany, in fact) to get a look at the
range and the cars are quite good-looking. Also when in North America I
feel that appearances in general have improved. Of course there are
exceptions and there are fine examples of pleasing shapes twenty years old
or more.

Last April in the US I hired a Sebring convertible and, for the few days I
had it, was pleased with it. Just the combination of white paint and a
beige top jarred a bit; black would have been so much sexier. (I never did
find the person at the rental company who made that purchasing decision...)

This is in reference to the "bright stylists" you mentioned.

DAS
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NB: To reply directly replace "nospam" with "schmetterling"
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.................................
it was a "merger" and instead perform a takeover. The bright engineers
and stylists left Chrysler in droves (with the exception of Jeep/Truck
Click to expand...
..................................
 
I was thinking more of US-company cars in general, but I take your point
about Chrysler designs being pre-takeover. I wasn't intending to suggest
that Chrysler's design improvements were due Merc ownership.

Interestingly, a recent Crossfire review in a respected national UK Sunday
paper, while mixed on technical matters, came out quite strongly in favour
of the appearance. It did, however, add that this may not be enough to lure
drivers away from their BMWs and Mercs etc.

Regarding staff moves, I knew about Bob Lutz, but I did not know he was a
designer 'by trade'.

DAS
 
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