[TETENAL]

Daimler sold Chrysler for 5.5 billion Euros to an American investment company. In 1998 they bought it for about 36 billion Euros. I guess it was probably not worth it.

The future name will be "Daimler AG". So they lost the Benz part.

[red rocket]

Originally Posted by TETENAL

I guess it was probably not worth it.

No shit.

Buying Chrysler was a stupid idea in the first place, I don't know what gains were hoping to make from that move.

Originally Posted by TETENAL

The future name will be "Daimler AG". So they lost the Benz part.

Strange, considering that their flagship product is the Mercedes‑Benz marque, everybody recognises those words the world over, and is associated with something else.

[Don Pickett]

Originally Posted by red rocket 

No shit.

Buying Chrysler was a stupid idea in the first place, I don't know what gains were hoping to make from that move.

They looted the company for capital at a time when they needed cash.

[centerchannel68]

Yeah, the merger was a joke. They bought chrysler, then fired all the chrsysler employees (which, I might add, was doing WELL before the merger) and replaced them with germans. Then both companies (mercedes and chrysler) started to suck.

Daimler bit off more than they could chew, and screwed up both companies.

[TETENAL]

Maybe they had Germans in the Chrysler management, but I seriously doubt they replaced all employees with Germans. Anyway, it was Chrysler that sucked. They made a loss of 1.1 billion Euros in 2006 while Daimler earned 6.6 billions.

If I recall correctly the problem was that Chrysler bet on gas-guzzlers which even in the USA become less and less popular.

[Atheist]

Originally Posted by TETENAL 

Maybe they had Germans in the Chrysler management, but I seriously doubt they replaced all employees with Germans. Anyway, it was Chrysler that sucked. They made a loss of 1.1 billion Euros in 2006 while Daimler earned 6.6 billions.

If I recall correctly the problem was that Chrysler bet on gas-guzzlers which even in the USA become less and less popular.

But I believe what centerchannel68 is trying to say is that the losses at Chrysler occurred while under German management.

[Lateralus]

There is a common misconception that Chrysler has always been the laggard in DaimlerChrysler.

But the fact is that at the time of the merger, Daimler needed Chrysler more than Chrysler needed Daimler. In fact, Chrysler was arguably in the best shape they had ever been. Very well received new vehicles, a very large surplus of Cash... etc.

Daimer essentially sucked the life out of Chrysler, both literally and figuratively, by using Chrysler's cash load to solve problems that really had nothing to do with Chrysler at all while not concentrating on Chrysler's domestic market here in the states.

Here's to hoping Cerberus comes in and puts their foot down to turn the ship around.

[Laminar]

Originally Posted by Lateralus 

a very large surplus of Cash...

Kind of like MacNN! * Hey, you capitalized it.

[Don Pickett]

Originally Posted by Lateralus 

There is a common misconception that Chrysler has always been the laggard in DaimlerChrysler.

But the fact is that at the time of the merger, Daimler needed Chrysler more than Chrysler needed Daimler. In fact, Chrysler was arguably in the best shape they had ever been. Very well received new vehicles, a very large surplus of Cash... etc.

Daimer essentially sucked the life out of Chrysler, both literally and figuratively, by using Chrysler's cash load to solve problems that really had nothing to do with Chrysler at all while not concentrating on Chrysler's domestic market here in the states.

Here's to hoping Cerebrus comes in and puts their foot down to turn the ship around.

A much better stated version of what I said above.

Although Mercedes/Dialmer/Whatevah! has the repuation of being bullet proof, they are far from. Because they specialize on the luxury segment their sales are very dependent on both the local European and worldwide economy doing well enough so that people have extra cash. When the economy isn't so good, or even when it's only so-so, Mercedes suffers. Such was the problem (among others) when the merger happened.

A friend of mine predicted this when the merger happened. His words were something like "Dialmer will suck Chrysler dry and sell what's left in pieces." Looks like he wad right.

[Lateralus]

Don; Have you had a chance to read Taken For A Ride? It really is an excellent account of the merger story and probably one of the best business books I have ever read.

The author included an 'update' of the situation with the release of the paperback. I'm hoping a new edition of the book is released to cover the 6 years worth of events since the paperback release.

[Don Pickett]

Originally Posted by Lateralus 

Don; Have you had a chance to read Taken For A Ride? It really is an excellent account of the merger story and probably one of the best business books I have ever read.

The author included an 'update' of the situation with the release of the paperback. I'm hoping a new edition of the book is released to cover the 6 years worth of events since the paperback release.

I haven't, but I will put it on my list.

[OldManMac]

Originally Posted by Lateralus 

Don; Have you had a chance to read Taken For A Ride? It really is an excellent account of the merger story and probably one of the best business books I have ever read.

The author included an 'update' of the situation with the release of the paperback. I'm hoping a new edition of the book is released to cover the 6 years worth of events since the paperback release.

I'm not Don, but I just put it on hold at my local library. Thanks for the tip.

[Lateralus]

Always fun to share a great book.

[mduell]

Is the E5.5b gross or net of the giant pensioner liability?

[TETENAL]

The new owner gets the pensions liability. Of the 5.5 billion Euros 4.5 billion go to Chrysler. The new owner also gets a 300 million Euros credit from Daimler.

Since 1998 Chrysler contributed 11 billion Euros in profit. They did cost 36 billions. That doesn't like Daimler "sucked the life out of it" for cash. On the contrary, the merger did cost them 24 billion Euros if I calculate correctly.

(source in German)

[Lateralus]

You're looking at the merger from the simplest possible perspective. But nothing about a merger of two mega corporations is simple.

Has buying Chrysler cost Daimler over the past 10 years? Of course. What did you expect? You don't shell out enough cash to outright purchase a corporation and expect a pure profit return on that investment in just 10 years. If anybody had forecasted that Chrysler would have profited 36 billion before 2007 when the merger occurred, the selling price would have been much, much, much higher than 36bn.

Daimer bought Chrysler for many reasons. The most obvious of which were; For Chrysler's cash horde, which Daimer thoroughly exhausted; For Chrysler's market penetration in lower-end markets, which Daimer actually does want to get into; And for Chryler's production capacity.

A merger goes far beyond only looking for a monetary return. Daimer bought Chrysler with a long term vision. But they dropped the ball completely and ruined the ability of either entity to reap any sort of benefit from the merger.

And your math isn't quite complete; 36bn (initial cost) -11bn (Chrysler's 10yr profit) -10bn (Chrysler's approximate war chest, now gone) = 15bn. Now, 15bn down may look bad until you consider that they're getting a large chunk of that back through the Cerberus sale and that they're getting to keep a 20% stake in Chrysler.

From that perspective, Daimer didn't get off too badly.

[Powerbook]

Originally Posted by red rocket 

No shit.

Strange, considering that their flagship product is the Mercedes‑Benz marque, everybody recognises those words the world over, and is associated with something else.

That's not strange, that's history. Daimler (brand) has been uses as a Jaguar spin-off name for decades. Damler's (company) top model today is rather the Maybach...

PB.

[Rumor]

Isn't a Euro a tasty Greek sammich?

Cerberus bought an 80% share in Chrysler for $7.4 billion.

[OldManMac]

Unfortunately, I don't think it's going to save Chrysler. They rely too heavily on truck sales to make money, much more than GM and even Ford do, and, now that they're independent again, I'm not sure they'll have the resources to develop fresh product. What I think will happen will be a slash and burn, where they'll cut even deeper on labor, focus on a few profitable lines, ditch the rest, and then sell the company again. Unfortunately, IMO, there are already too many car makers, and with the Chinese coming here soon, GM and Ford are going to have a tough enough time surviving, let alone Chrysler.

[turtle777]

Originally Posted by Rumor 

Isn't a Euro a tasty Greek sammich?

Teh funnay.

-t

[highstakes]

This was not a "merger", this was an acquisition...they only used that word so that Daimler could acquire Chrysler. If the image was that Daimler was acquiring Chrysler, then Chrysler itself would've suffered a major brain drain and most American employees wouldn't be happy with it. In this "merger", there were 10 Germans and 9 Americans in the board of management...it sounded like a balanced company but the smart ones (people like Bob Lutz, whom resigned shortly after talks of this "merger" started) realized that Germans would always win in tie-breaker votes.

[Ado]

Originally Posted by red rocket 

No shit.

Buying Chrysler was a stupid idea in the first place, I don't know what gains were hoping to make from that move.



Strange, considering that their flagship product is the Mercedes‑Benz marque, everybody recognises those words the world over, and is associated with something else.

I think they did it for distribution knowledge and power.
Chrysler is involved with Mitsubishi, Catterpilla, Jeep and some others.
They all use the same system to distribute their products.
America was once ahead in this game and ppl who didnt jump onboard in the mid 90's suffered alot, Fiat sPa was one of them who learned the hard way.
Toyota is now king.

[red rocket]

Originally Posted by Powerbook

That's not strange, that's history. Daimler (brand) has been uses as a Jaguar spin-off name for decades. Damler's (company) top model today is rather the Maybach...

Daimler Motor Company has been around in Britain since 1886. BSA acquired it in 1910, Jaguar in 1960. The name has had a good reputation in Britain for over 100 years.

Outside of Britain, ‘Daimlers’ didn't do so well. As a consequence of which Daimler Motoren Gesellschaft started calling all its cars ‘Mercedes’ since 1902, and the last time any German car was sold under the name ‘Daimler’ was in 1908.

1. German‑made ‘Daimler’ cars didn't sell well, so they called them ‘Mercedes’.
2. Post‑1926, they started calling them ‘Mercedes‑Benz’.
3. Even during the Chrysler era, the name of the firm included a car manufacturer.
4. Now, there is no clear link between the product (Mercs) and the company (Daimler).
5. The product ‘Daimler’ is made by Ford.

Maybach owners do not think of their cars as ‘Daimlers’, no more than Bugatti owners think of their cars as ‘Volkswagens’.

Thus, I do find it strange that they dropped the ‘Benz’ from the name (or rather, chose not to re‑adopt it for the post‑DaimlerChrysler era). It does make sense from a strict historical perspective, of course. However, from an emotional, product/brand‑identification point of view, it seems like a poor decision to me. The fin de siècle licensing of the ‘Daimler’ brand has caused them enough headaches, you'd think they'd have learned from that.

[mac128k-1984]

I think its a sad day, not because its Chrysler was sold but what Daimler did to them. I'm not business expert but from my untrained eyes it does seem that before the merger Chrysler had a lot of capital and good things going for them (at the time so didn't GM and Ford). Now they had little capital, a crushing pension burden.

I'm a dodge fan, I typically by dodges or jeeps and so I want to see this American company (along with Ford and GM) to turn things around.

[analogika]

Originally Posted by red rocket 

1. German‑made ‘Daimler’ cars didn't sell well, so they called them ‘Mercedes’.
2. Post‑1926, they started calling them ‘Mercedes‑Benz’.

Not quite.

Gottlieb Daimler and Karl Benz were rivals. Karl Benz invented the automobile, and Gottlieb Daimler built his shortly thereafter. They were two separate companies until 1926.

Originally Posted by wikipedia

Daimler-Benz AG was a German manufacturer of automobiles, motor vehicles, and engines which was founded in 1926. An Agreement of Mutual Interest—which would be valid until the year 2000—was signed on May 1, 1924 between Karl Benz's Benz & Cie. and Daimler Motoren Gesellschaft, which had been founded by Gottlieb Daimler and Wilhelm Maybach. Daimler had died in 1900 and Maybach had left in 1907.

Both companies continued to manufacture their separate automobile and internal combustion engine brands until, on June 28, 1926, when Benz & Cie. and Daimler Motoren Gesellschaft formally merged—becoming Daimler-Benz AG—and agreed that thereafter, all of the factories would use the brand name of Mercedes-Benz on their automobiles. The inclusion of the name, Mercedes, in the new brand name honored the most important model series of DMG automobiles, the Mercedes series, which were designed and built by Wilhelm Maybach. They derived their name from a 1900 engine named after the daughter of Emil Jellinek. Jellinek became one of DMG's directors in 1900, ordered a small number of race cars built to his specifications by Maybach, stipulated that the engine must be named Daimler-Mercedes, and made the new automobile famous through motorsports. That race car later became known as the Mercedes 35 hp. The first of the series of production models bearing the name, Mercedes, had been produced by DMG in 1902. Jellinek left the DMG board of directors in 1909.

The name of Daimler as a brand of automobiles had been sold by DMG—following his death in 1900—for use by other companies, so the new company, Daimler-Benz, would have created confusion and legal problems to include Daimler in its new brand name, and therefore, used Mercedes to represent the Daimler Motoren Gesellschaft interest. Karl Benz remained as a member of the board of directors of Daimler-Benz AG until his death in 1929.
Although Daimler-Benz is best known for its Mercedes-Benz automobile brand, during World War II it also created a notable series of aircraft, tank, and submarine engines.

[highstakes]

Originally Posted by mac128k-1984 

I'm a dodge fan, I typically by dodges or jeeps and so I want to see this American company (along with Ford and GM) to turn things around.

I doubt GM and Ford will turn things around, they are too focused on making trucks and suv's.

[mac128k-1984]

Originally Posted by highstakes 

I doubt GM and Ford will turn things around, they are too focused on making trucks and suv's.

To some degree that are all in the same boat. They all have issues with retirees, that is, they are paying a higher percentage to retirees then their Japanese and German counterparts (I'm not making a moral judgement) add on the fact that they sat on their thumbs while suvs and trucks were selling well while their competitors worked at improving all of their cars

[Kevin]

Good. Maybe they will go back to making decent cars again. Daimler really screwed up that company something awful.

[Lateralus]

Looks like Chrysler is ditching the Daimlerized winged logo and going back to the old Pentastar.

[highstakes]

Originally Posted by mac128k-1984 

To some degree that are all in the same boat. They all have issues with retirees, that is, they are paying a higher percentage to retirees then their Japanese and German counterparts (I'm not making a moral judgement) add on the fact that they sat on their thumbs while suvs and trucks were selling well while their competitors worked at improving all of their cars

Yeap, and if they dont do anything about those unions, they will ruin GM and Ford jobs here in the U.S.

[highstakes]

Originally Posted by Lateralus 

Looks like Chrysler is ditching the Daimlerized winged logo and going back to the old Pentastar.

Nice
Hope they can get back to where they were before this acquisition.

[Dakarʒ]

That logo will forever make me think of a Dodge Omni. Or a K car.

[Don Pickett]

Originally Posted by highstakes 

Yeap, and if they dont do anything about those unions, they will ruin GM and Ford jobs here in the U.S.

Actually, the problems American auto manufacturers are having have almost nothing to do with unions, despite what they say. Japanese auto workers, both unionized and non-unionized, are paid as well as American workers, and Japanese companies with plants in the U.S. are able to pay their non-union workers wages equal to the wages of unionized workers in American companies. Additionally, the UAW has made some major concessions to American auto workers over the last ten years.

The problem is largely one of corporate leadership refusing to keep abreast of the times. While Ford and GM are having trouble selling the SUVs and trucks they're making, Japanese car companies are selling every hybrid car they can, with some waiting lists months long. For reasons I haven't been able to understand, it seems the people making the decisions at Ford and GM are stuck in a time warp circa 1985: it's all about the biggest car with the most powerful engine, seeming to miss that gas is $4 a gallon in some states. I personally think part of this problem stems from excessive executive compensation. If you get a $100 million severance package no matter if the company is doing well or tanking, what incentive do you have to do a good job?

[Railroader]

Originally Posted by Don Pickett 

Actually, the problems American auto manufacturers are having have almost nothing to do with unions, despite what they say. Japanese auto workers, both unionized and non-unionized, are paid as well as American workers, and Japanese companies with plants in the U.S. are able to pay their non-union workers wages equal to the wages of unionized workers in American companies. Additionally, the UAW has made some major concessions to American auto workers over the last ten years.

The problem is largely one of corporate leadership refusing to keep abreast of the times. While Ford and GM are having trouble selling the SUVs and trucks they're making, Japanese car companies are selling every hybrid car they can, with some waiting lists months long. For reasons I haven't been able to understand, it seems the people making the decisions at Ford and GM are stuck in a time warp circa 1985: it's all about the biggest car with the most powerful engine, seeming to miss that gas is $4 a gallon in some states. I personally think part of this problem stems from excessive executive compensation. If you get a $100 million severance package no matter if the company is doing well or tanking, what incentive do you have to do a good job?

You nailed it 100%. I've been saying this in here for years, so don't be too discouraged when you see the same people say the same things without anything to back themselves up.

[Railroader]

Originally Posted by Dakarʒ 

That logo will forever make me think of a Dodge Omni. Or a K car.

I just hope the reintroduce the hood ornament with the "crystal" in the middle.

[Dakarʒ]

That could bring old people back from their graves.

[OldManMac]

Originally Posted by highstakes 

I doubt GM and Ford will turn things around, they are too focused on making trucks and suv's.

Actually, Chrysler makes more of its money on truck sales than Ford and GM. They're all too indebted to the truck market, however.

Don Pickett, you are spot on in your assessment. I've been saying that for years as well. The problem with GM and Ford is that they don't make cars that people want to buy. They had too many years where they owned the vehicle market, and they dismissed the Japanese imports as junk when they first arrived here, which they were. The American brass however, were too isolated and arrogant, believing that they could hold on to the market, while the Japanese learned from their mistakes and realized that quality matters and that smaller cars were the wave of the future. That's also why it's not too smart to discount Toyota's entry into the full size truck market. It may take them a few years to get a foothold, but they're willing to wait, and they will get it.

[Rumor]

Tacomas are eating up sales in their class and everyday I see more Tundras on the road.

[Kevin]

Originally Posted by KarlG 

It may take them a few years to get a foothold, but they're willing to wait, and they will get it.

I am doubting this. The average truck owning person in the US is also pretty darn pro-America.

It's either Ford, Chevy, or Dodge.

[vmarks]

Originally Posted by Lateralus 

Looks like Chrysler is ditching the Daimlerized winged logo and going back to the old Pentastar.

The original Chrysler logo, which vanished after 1954 from all but 1955-1956 Windsors, C300s, and 300Bs with manual transmissions*, and reappeared in 1994, is a rendition of a wax seal complete with ribbon affixed at the lower right. The thunderbolts above and below the name are actually "Z"s, a tribute to the prototype built before Chrysler took over Maxwell, which took the name "Zeder" from chief engineer Fred Zeder.

The winged logo is the original. The pentastar appeared in 1963.

[smacintush]

Speaking of logos, when is this lame-ass pathetic excuse for a modern car logo finally gonna die?



(sorry but it had to be said)

[Kevin]

I've always liked Ford's logo. If it's not broke..

[Lateralus]

Originally Posted by vmarks 

The original Chrysler logo, which vanished after 1954 from all but 1955-1956 Windsors, C300s, and 300Bs with manual transmissions*, and reappeared in 1994, is a rendition of a wax seal complete with ribbon affixed at the lower right. The thunderbolts above and below the name are actually "Z"s, a tribute to the prototype built before Chrysler took over Maxwell, which took the name "Zeder" from chief engineer Fred Zeder.

The winged logo is the original. The pentastar appeared in 1963.

Negative.

The heart of the current winged logo may be an adaptation of the original logo, but the wings themselves are purely Daimler. Hence why I stated it the way I did.

Before going to the Pentastar, some Chrysler vehicles had the logo winged but the wings varied from model to model. But the official logo was the heart of the current one.

[Lateralus]

Originally Posted by smacintush 

(sorry but it had to be said)

No, it didn't...

[OldManMac]

Originally Posted by Kevin 

I am doubting this. The average truck owning person in the US is also pretty darn pro-America.

It's either Ford, Chevy, or Dodge.

Get back to me in five or ten years. Luxury cars were once thought to be an exclusive domain of the Americans' also.

[Kevin]

Originally Posted by KarlG 

Get back to me in five or ten years. Luxury cars were once thought to be an exclusive domain of the Americans' also.

Really? Since when?

[OldManMac]

Originally Posted by Kevin 

Really? Since when?

Until the Japanese got a firm foothold in the American car market, there was no such thing as Infiniti, Lexus, or Acura, and BMW, along with Mercedes, among those who come quickly to mind, didn't have the market share, both in terms of numbers and percentages, they do today. Ford just stopped making the Town Car, and Cadillac has only lately seen a resurgence in sales. California has the largest luxury car market in the country, and they vastly prefer imports over domestic brands. That's "since when."

[Railroader]

Originally Posted by KarlG 

Get back to me in five or ten years. Luxury cars were once thought to be an exclusive domain of the Americans' also.

Maybe 50-60 years ago, but Benz, BMW, and Rolls have held the title of luxury for quite a while.

[sek929]

Originally Posted by Kevin 

I am doubting this. The average truck owning person in the US is also pretty darn pro-America.

It's either Ford, Chevy, or Dodge.

That's because they are the best damn trucks made.

Ford sold nearly 1 million brand new F150s last year, that is pretty damned impressive. If you need a heavy-duty truck Toyota simply isn't there yet, once they release a diesel powered monster like the 3500HD, F450, or Cummins Dodges then I suspect the big boys should worry.

What US automakers need to do is create a passenger car worth buying, the trucks can only keep them afloat for so long.

Chrysler was doing so damned good before the merger. It seems the big three cant catch a break lately.

[OldManMac]

Originally Posted by Railroader 

Maybe 50-60 years ago, but Benz, BMW, and Rolls have held the title of luxury for quite a while.

Rolls is a limited market car, with only a few hundred sold annually in the U. S., and as such, is not a concern to the U. S. auto industry. Mercedes and BMW did not have the market share, even 40 years ago, that Cadillac, Lincoln, and Chrysler did in the U. S. market. My point, which is still valid, is that Toyota should not be underestimated in the pickup truck market. As little as 30 years ago, if someone had told the GM, Ford, and Chrysler execs, that they would be fighting for their market share in luxury cars against the Japanese and others, they would have scoffed. U. S. auto execs have a long history of short-sightedness, which is the reason they're in the mess they're in today, and which is why Toyota is going to be the #1 auto producer in the world extremely soon. It will take them longer to capture more of the pickup market, as Kevin is correct in that it is still largely an American brand loyal market, but that doesn't mean they're not going to fight to increase their share, and that they're going to give up. It's taken them 40+ years to get where they are now; it's taken the Americans less time to give up, looking only at what sells today, and they can't even figure that out anymore.