Schrempp Out on His Tokus

No doubt the final straw was paying Iacocca big bucks for making like a
dummy in bum ads. Its good riddance to bad trash as I see it from the gist
of this news release.

 

You think CocaNuts got big bucks? (and it wasn't Chump that was being
that idea - it was probably Zetche).

Zetsche also gave Chrysler the green light to use Celine Dione (and
she didn't come cheap). He also gave us the CrossFryer.

Now he's replacing Chump.

Maybe he'll sign up David Hasselhof for some German Mercedes
commercials.

Get this:

"Dieter Zetsche, a popular, well-regarded executive who turned around
the money-losing Chrysler division"

What a load of bullshit. Chrysler was cash-rich and had the 300m and
PT cruiser when the acquisition happened. Zetche has nothing to do
with Chrysler's sales until the Pacifica and LX cars came out (and I
don't think the Pacifica was the hit that Chrysler was looking for).

Thomas LaSorda (a Canadian) will take over the Chrysler division
(didn't he manage the Dodgers?).

 

No doubt the final straw was paying Iacocca big bucks for making like a
dummy in bum ads. Its good riddance to bad trash as I see it from the gist
of this news release.

This kind of thing always happens after a major acquisition.

The problem here is you had a smaller company - Daimler - which was
successfully selling into an upper niche of the market. In short, a high
margin, low volume, company. The problem is that this kind of a company
has no growth prospects since they pretty much dominate their niche.

Now, you could leave things well enough alone, and all the investors could
continue making their 100 million+ a year and be done with it.

But, greed forced a change. The idea is to convert from a small, high
margin,
low volume company to a big, low margin, high volume company. If you manage
things right then the investors all end up now making 100+ billion a year.

Daimler chose the acquisition route to doing this. And, they are well on
the
way to being that big, low margin, high volume company.

But, this involves a fundamental corporate culture shift. And until a
generation
passes and all your employees have stopped pining for how much better
things were in the old days, and bought into the new paradigm, they are
going
to actively work to undermine what your doing. Your job as CEO is to
ruthlessly fire your managers who do this to you until people start getting
the
message. Obviously Schrempp didn't have what it took to break up the
old boys club back in Damlier.

Read between the lines here. Zetsche isn't critical of turning Daimler into
a
global company. He's critical of the STRATEGY employed to turn Daimler
into a global company. Once he gets in there, you are dreaming if you think
he's going to shrink DC back down to a smaller company again.

Ted

 

By non-US standards Mercedes has not been a "low-volume" car producer for
many, many years. I don't know the numbers for the year of the Chrysler
acquisition, but now the output is about 1 million passenger cars per year.

There is nothing 'upper niche' about any of the smaller-engines non-S-Class
cars. C-Class and E-Class are top sellers in Germany and are ubiquitous.

Furthermore, top Daimler-Benz management has been frittering effort for
years before the Chrysler 'adventure'. Household electrical goods,
aerospace... all big loss-makers.

DAS
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