Former Chrysler Chiefs Defend Deal As Merger Of Equals

It's informed testimony by people who were there at the time, unlike all the
fools here who think anything associated with Daimler is the devil himself.

 

From http://www.thecarconnection.com mailing on Friday 05-DEC:

Former Chrysler Chiefs Defend Deal As Merger Of Equals

Former Chrysler chief Robert Eaton and James Holden testified in Delaware
court Wednesday afternoon and Thursday that they did not think of the deal
that brought Daimler-Benz and Chrysler together in 1998 as a "takeover."

The testimony surprised and frustrated lawyers for billionaire financier
Kirk Kerkorian, a former Chrysler shareholder, who has brought a $3 billion
suit against DaimlerChrysler alleging German management, especially chairman
Juergen Schrempp, hoodwinked Chrysler shareholders into approving a merger
that was really a takeover. "I don't believe that Mr. Schrempp has ever take
control of the company," Eaton testified in response to questions by an
incredulous Terry Christensen, lawyer for Kerkorian. Eaton also testified,
though, that the Financial Times article in which Schrempp implied he never
intended Chrysler to be anything but an operating unit, made him angry. "If
he said that, he was after control of Chrysler," Eaton said. "Obviously
there wouldn't have been a business agreement put together. Chrysler was not
for sale."

....

Former Chrysler CEO James Holden who succeeded Eaton as head of Chrysler,
and who was sales and marketing chief when the "merger" took place in 1998,
said he still views the deal as a merger and told the Judge that Chrysler
may not have survived the recent economic downturn without the deep pockets
of Daimler-Benz. ...

***

I think it's really amazing that Eaton and Holden are still defending the
deal, in light of Eaton's assertion that the deal wouldn't have been put
together if they had realized Schrempp was after control of Chrysler, or the
part where Holden is claiming that Chrysler would've tanked if it weren't
for Daimler's 'deep pockets'. At best the latter is pure speculation made
by somebody who was ousted before the economic downturn really began, at
worst it's revisionist history.

.. --Geoff

 

It seems to me that US people are upset because Chrysler came under the
control of a German company.. thats how some felt in Sweden as their auto
industry was bought up by US companies, and how Jaguar and Aston Martin felt
in the UK about the Ford takeover.. live with it.. some Chrysler products
have benefitted from the use of Mercedes technolgy and parts.. re the Jeep
lineup (and I am a Jeep owner myself), many feel that Chrysler (pre
takeover) have done nothing for the original AMC models.. GM are axing the
Oldsmobile name as of next year, and the Camaro is a victim too.. when
models become stale, somebody has to do something.. leaving model ranges as
they are with little or no change reults in what happened in the UK..
foreign competition wiped the mainstream makers out..

 

Ah, but that's not how business operates, modern business anyway. That
isn't what
happened in the UK.

Today it's all about empire building and creating monopolies. You see when
you have
a market that only has about 3-4 major suppliers in it, the suppliers have
such a large
economy of scale going that a tiny producer cannot manufacture anywhere
close to the
cost of manufacture for the 3-4 large suppliers. The large suppliers in
turn when there's
that few of them, they all have a large enough chunk of the market to make a
pile
of money without attempting to steal market from the others. So it's to
none of their
interest's to initiate a price war, and while they don't actually overtly
collude with
each other, they all set prices similar to each other.

So today what goes on is these large businesses will look at a small market
like
the UK and they will use the huge revenue they are getting elsewhere to go
in and
dump product, acquire smaller producers, etc. in short do whatever it takes
to
eliminate all but 3-4 suppliers. Then once that happens all of the
remaining suppliers
jack up their prices and use the revenue from this to go elewhere and repeat
the
process.

Ted

 

I think it's really amazing that Eaton and Holden are still defending the

....who are testifying that they weren't well informed.
--Geoff