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DaimlerChrysler AG Automobile manufacturer is the largest car producer in the globe. Chrysler Corporation in the United States and Daimler- Benz AG in Germany merged in November 1998 to form the giant car maker.
The vehicles built by Daimler Chrysler AG include Mercedes Benz collection of luxury cars. The cars are sold under the name; Jeep, Dodge cars, Chrysler, sport utility vehicles, minivans and pick-up trucks. They also produced buses, trucks and vans with the brand names; Western star trucks, Setra, Sterling, freightliner and Mercedes Benz. The vehicles are absolutely amazing. My latest C Class Mercedes Benz offers me comfortability and prestige. Some of my friends also prefer Mercedes Benz car collection.
The revenue from sale of DaimlerChrysler AG products are usually based in Europe and United States. The Chrysler group divisions and Mercedes car group normally take a huge chunk of the company’s profits. However, the company has experienced some problems in recent years mostly contributed by their investment in Mitsubishi motors. The Chrysler group division got a loss $630 million in 2003 due to slow sales in the US and costs of restructuring.
In addition to car manufacturing business, DaimlerChrysler is a major company offering Information Technology services in Germany and provides numerous financial services such as insurance, dealer financing, leasing financing and vehicle sales services mostly in Europe and North America. DaimlerChrysler holds 33 percent shares in EADS (European Aeronautic Defense and Space Company) which is the second largest defense and aerospace company in the world.
The CEO of Daimler Benz, Jurgen Schrempp, had suggested in 1996 that the company needed a manufacturing partner to adjust to the increasingly globalized automobile market. Chrysler’s CEO, Eaton, also came up with the same idea based on two major factors that emerged; looming globalized car manufacturing capacity which could have led to consolidation of the industry and the economic crisis in Asia which reduced the demand. These factors reminded Chrysler and Daimler Benz that they would be rendered regional automotive industry players and not international players if they continued to be lone rangers.
Chrysler and Daimler Benz negotiated a successful $37 billion deal which culminated in the formation of DaimlerChrysler in 1998 generating total revenue of $130 billion with factories in thirty four countries and total annual sales of 4.4 million truck and cars. The two companies are compatible geographically, Chrysler dominating in North America and Daimler strong in Europe, and in relation to product lines, with Chrysler’s production of low cost trucks, sport utility vehicles and minivans and Daimler’s manufacture of high quality and luxurious passenger cars.
In 1999, DaimlerChrysler focused on getting $1.2 billion in annual cost savings from procurement and other departments. The company categorized its automotive operations into three different divisions; commercial vehicles, the Chrysler group and Mercedes Benz passenger cars. In November 1999, DaimlerChrysler announced plans of phasing out the Plymouth brand. The Debis operations department was merged with Chrysler’s operations to form DaimlerChrysler operations while DASA was turned to DaimlerChrysler Aerospace. Towards the end of 1999, the company negotiated a deal to merge DaimlerChrysler aerospace with Spanish CASA and French Aerospatiale Matra to form European Aeronautic Defense and Space Company (EADS).
In 2000, automobile manufacturer set out a strategic plan to become the leading car maker in the world after three years. The company’s essential needs was to expand its presence in Asia, where the company generated less than 4 percent of its revenue, and to attain a lion’s share of the car market in Europe. They achieved these goals by purchasing 34% shares in Mitsubishi Motors at around $2 billion. The company later acquired more shares in Mitsubishi Motors by buying 3.3 % shares in Volvo. Within the same year, DaimlerChrysler partnered with Ford and GM to form an internet driven global business supplier exchange.
Competition remained water tight in the automotive industry driving DaimlerChrysler to revise its business strategies. In 2003, the company sold Aero Engines services to acquire 43% shares in Mitsubishi Fuso Truck and Bus Corporation with intentions to capture the increasing truck market in Asia. In 2004, DaimlerChrysler refused to bail out Mitsubishi when they faced huge debts and massive losses. This strained the business relationship between the two partners which resulted in the reduction of engineering capacity in DaimlerChrysler as they heavily relied on Mitsubishi to manufacture small and medium cars.
Chrysler: More than just a Company
Chrysler Group LCC is widely known for its luxury cars, sports cars, SUVs, and other sedans; you name it, and they have it. An American-based automaker, its current headquarters is in Auburn Hills, Michigan.
A Brief History of the Chrysler
The company was founded by Walter Chrysler has originated from Maxwell Motor Company when the company was reorganized. Walter Chrysler came to this company during its lowest point; it gave birth to the now well established Chrysler automobile corporation. Its first product was a 6 cylinder car with unique innovations packed in it. Some of these developments were its hydraulic brakes which were chiefly developed by Chrysler himself but patented by Lockheed. He was also recognized for designing the ridges of the rims in the wheels which prevented flat tires from coming off the wheel. This was subsequently adapted by most of automobile companies worldwide. Additionally, what made the cars of Chrysler customer friendly was because of their surprisingly low reasonable price.
The Birth of the Chrysler Corporation and its Brands
In the year 1928, Chrysler began segregating its cars according to their functions as well as price. The Plymouth was born to serve low-priced automobiles. The DeSoto, back then was made to sell medium-priced cars. Also, the Dodge automobile company was bought from the Dodge brothers to serve with high-priced cars. However, today the DeSoto has been serving luxury cars; switching places with Dodge with some of its medium-priced cars.
Another brand division, the Imperial, was used to compete with certain top-of-the-line companies like Cadillac and Lincoln. It primarily made automobiles with V8 engines and automatic transmission. However, in 1973 Imperial was absorbed by Chrysler Corporation. Also, the brand Valiant was introduced in the 1960s. This was formerly a model of the Plymouth, and then the DeSoto made one of it too. All of these were the brands and divisions of Chrysler Corporation that reigned with superiority during the 1940s up to the 1970s.
Later brand acquisitions were made with American Motors. Jeep was acquired from them; this brand served off-road vehicles, pickup trucks, as wells as SUVs.
The Daimler – Chrysler Merger
In the year 1997, Chryslers then CEO Bob Eaton rendered a speech that would have consisted of some of the most worrying words. “…there may be a perfect storm brewing” this phrase caught the attention of every employee and crew in the auditorium. He figuratively said that there was a cold front of overcapacity; a nor’easter that conveyed retail revolution which empowered buyers; and a hurricane that represented a rise in the environmental awareness that consequently threatened the industry of combustible engines. These statements were somehow taken by Eaton from the book “The Perfect Storm”, he also said that the lesson of the book told him that when there is a storm coming, you have to nowhere near the storm area, and you must not be alone. These were the wise words Bob Eaton uttered in front of the crowd.
Another automobile company, Damier-Benz, was also struggling in the U.S. Only 1% of cars in the United States belong to this company at that time. The company’s CEO decided that they have to find another company to merge with. And the perfect match they found was Chrysler Corporation.
After some time, and a lot of discussions and business meetings, Bob Eaton announced that they were merging with Damier-Benz. Nearly reaching $37 billion, this was the largest trans-Atlantic merger ever made. Jürgen Schrempp, Damier-Benz’s CEO coined the term “merger of equals” as they and Chrysler shared the same hardships during that time, and that it would be of an advantage if the merger materialized.
However, as time passed by, the merger was proven to be a failure. Chrysler was disappointed with the new company’s performance and its fair profit. Certain differences emerged with the managers of both companies. They would throw words at each other; many Daimler-Benz executives said that they would never drive a Chrysler; while Chrysler managers uttered that the Jeep Grand Cherokee earned more than the Mercedes M-Class.
The president of Chrysler during the year 2000 described this feud as a ‘marrying up, marrying down’ situation. The company Damier- Benz was largely recognized by its luxury cars and was regarded as a company that sells fancy and stylish automobiles; while the Chrysler were especially made for medium to low level automobiles. This idea created an invisible tension between the American and the German employees of the merged corporation. Many German staffs would even argue that they were being given a salary less than the Americans were getting; they even described the salary of their counterparts as 4 times bigger than theirs. Even Chrysler’s CEO Bob Eaton finally succumbed to the situation and began showing signs of withdrawal and depression; he would not talk to his employees when asked to, or would not initiate motivation when most needed.
Chrysler Today: A Comeback
Today, Chrysler has performed well in the automotive industry. It has been ranked by the International Organization of Motor Vehicle Manufacturers as 2010s 13th largest vehicle producers in the whole world. Overall vehicle production by Chrysler in the year 2010 was estimated at 1.58 million. It was also hailed as one of Big Three Automakers in the United States alongside with Ford and General Motors.
During the World War II, Chrysler has also manufactured several vehicles and other products to best serve the U.S. military. They made superior Chrysler tanks compared to Ford or General Motors. They also made engines for airplanes such as jet engines. Missiles were also manufactured through their company such as the medium- range ballistic missile called PGM-19 Jupiter.
With its new tagline “Imported from Detroit”, Chrysler offers many innovative automobiles that would serve not only Americans, but everyone. Today, Chrysler still serves not only the U.S. community, but also the different countries that appreciate the long history of this automobile company. With its ups and downs, it managed to survive many economic busts and depressions. Chrysler has surely established its foundations; and it will definitely be staying in the automobile industry for many years.
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