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The “Merger Of Equals” And The Nuclear Fallout That Came Afterwards: Regular Car Reviews Tackles DaimlerChrysler!

The “Merger Of Equals” And The Nuclear Fallout That Came Afterwards: Regular Car Reviews Tackles DaimlerChrysler!

Chrysler has had a weird sales history, best described as “feast and famine”. Some years they knocked everything out of the park: the Forward Look cars, the 1968 B-body musclecars, the K-cars and minivans, the LH-platform sedans. Other years, you wondered if Chrysler was doing their best to beat Ford, GM and AMC on the race to the bottom…see also: sales banks, the Aspen/Volar√© disaster, K-cars a decade after they were introduced, the Ultradrive automatic transaxle. When the company gets it right, they got it, but when they screw the pooch…it’s honestly amazing that there are still Mopars of any sort being cranked out, no matter who owns the brand.

In the mid-1990s, Chrysler was on a serious high. The first-gen Neon was a hit, the LH cars were a couple of years into great sales, the redesigned Ram pickup shattered expectations, the “cloud car” intermediates sold well and, via the North American Touring Car Championship, gave Chrysler a racing image, and the Viper was still a halo car that captured imagination. Money was flowing in and cars were flowing out. But in 1998, just in time for the redesigned LH cars, it was announced that Chrysler had paired off with Daimler-Benz to create “The Match Made In Heaven”: DaimlerChrysler. In almost ten years, the partnership did nothing to advance either side and in 2007, Daimler AG sold the Chrysler half to Cerberus Capital Management, a move that damn near sank everything associated with Chrysler to the bottom of the sea. Just how dysfunctional was the marriage between the Germans and the Americans? Let “The Roman” from Regular Car Reviews explain it:

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7 thoughts on “The “Merger Of Equals” And The Nuclear Fallout That Came Afterwards: Regular Car Reviews Tackles DaimlerChrysler!

  1. Bob J

    A good story, as far as it goes, but it leaves out some crucial information. When this “Merger of Equals” was initiated, I recall saying to my co-workers WTF?! What on earth is Chrysler merging with Daimler for?! What could Daimler possibly offer to Chrysler, and what in &$&%$ does Chrysler get out of it? They didn’t need the “engineering skills” that Mercedes brought to the table, and as you pointed out, at the time Daimler certainly wasn’t a fount of financial acumen.

    I thought it ridiculous at the time, and having gained greater insight into the details of the “merger (buyout)”, I’m more firmly than ever of the opinion that this was a disaster from the get-go.

    Chrysler had somewhere between 10 and 13 Billion dollars saved for new product development at the time. That money was used by Daimler to bail their a**es out and they dumped there losses on the “poor, incompetent Americans…”. Daimler took the most profitable car company in America and dropped them to dead last. Way to go dudes.

    Lee Iacocca himself has admitted that were it not for his choice of Bob Eaton, Chrysler would still be an American company. Bob Eaton was picked over Bob Lutz because he and Iacocca hated each other like a hen hates sharp-cornered eggs. That was Lee’s parting shot to Bob Lutz, who was the right guy to take over Chrysler, and led to the downfall of Chrysler. (IMHO)

    Bob Eaton was so bad that even GM got rid of him. Think about that for a time (in the perspective of the times). Bob Eaton was the guy that forced GM to buy Diesel engines from Italy because he quashed GM’s development of small Diesels when Europe was demanding them, because “he didn’t like them…”

    Bob Eaton was terrified of Kerkorian and Iacocca (who resented being forced to retire) and ran right to the spider’s web, and the chief spider was no less than Juergen Schrempp, possibly the worst CEO in living memory (in the automotive are for sure, and with other areas such as Aircraft). Bob Eaton, bailed out of Chrysler with 30+ million dollars in his jeans and the Chrysler workers got shafted. Bob Eaton wondered why no one in the American auto industry wanted to have anything to do with him after that debacle.

    If you have the opportunity, read “Taken for a ride” (make sure your blood pressure can take it). It made me angrier than I’d been in a very long time.

    You might’ve guessed I have strong feelings about this one!

    Bob J

  2. DanStokes

    The word around Detroit (remember, I was in the car culture in a unique position – at EPA we saw reps from all automotive players) was this:

    Question: “How do you properly pronounce Daimler-Chrysler?” Answer: “The Chrysler is silent.” From my friends at Chrysler at the time, that about summed it up.


    1. Bob J

      Yep, I remember that phrase from back then. As is happened, I was traveling to and from Germany, and it was obvious that the Germans had no clue as to how to run an American car company. I’m uncertain if that was ever in their minds. What I believe is that they intended to gut Chrysler and leave the hulk by the side of the road. I think they didn’t give a rat’s A** about Chrysler. I remember the 51% to 49% ownership ratio.. I might be math challenged, but I could understand a buyout when I saw one.

  3. 69rrboy

    This was a hostel take over from moment one. My old neighbor was a tranny mechanic at a Merc dealership and he told me their quality was terrible in those days and their service departments were even worse. They were bleeding money BAD and needed to find a new source of income. Chrysler was killing it back then and the krauts saw a way out.

    I talked to a guy at Mopar Nats who worked in the design department at Chrysler and he told me at first everything sounded pretty good. They brought a tour threw their department and they said “we love everything you’re doing!”. Then he said when the deal officially went thru those same people came back in and took a couple new designs they liked(the charger concept car, etc). Then they basically set a trash can at the end of the table and brushed everything else in and said “ok, now here’s what WE’RE going to do from now on!”. After that things went straight off a cliff and never did get better. Yes of course like everything else there were a few good things that came from the deal but overall it was a horrendously terrible decision.

    Did anybody ever notice they kept 10% ownership when Fiat took over? That was so if a profit was made they’d still get a cut but wouldn’t get the blame if things went south. Just my opinion but I have no doubt that’s the reason. The old boss Deiter Deutschbag still hangs around in the F1 pits. I’d like to slap that stupid mustache off his face for ruining the company.

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