Daimler Chrysler Emulsion
The DaimlerChrysler emulsion http://www.economist.com/node/341352 WHEN, two years ago, Daimler-Benz, Germany's most profitable car company, and owner of the world-beating Mercedes marque, revealed that it was merging with Chrysler, the smallest but most efficient of America's Big Three car producers, the two companies embarked on a cross-border deal based on what seemed to be impeccable industrial logic.
Cross-border mergers are notoriously tricky. For DaimlerChrysler to succeed requires cohesion not just between two headquarters, in Stuttgart and Auburn Hills, Michigan, but also between a host of offices and factories with different national and corporate cultures. To overcome such differences, the merged company took an unusual approach.
In its pre-merger planning Daimler put little weight on the fact that the deal would be a cross-border one. Apparently, it assumed that this would create no special problems. According to Eckhard Cordes, one of three Daimler managers to take part in the pre-merger discussions with Chrysler (the others were Jürgen Schrempp, the group's chairman, and Jürgen Hubbert, a board member responsible for Daimler's Mercedes-Benz car division), questions raised by the deal's cross-border nature were not specifically asked until after its broad terms had been agreed.
Mr Cordes says that three big issues preoccupied the Daimler team. First, against a background of consolidation in the car industry, they were trying to put together two companies with strong and distinctive heritages, so how best could they do this? Second, given that there was no precedent for such a merger, was the deal at all feasible? And third, were Daimler and Chrysler bold enough to manage the difficult task of post-merger integration successfully?
None of these issues, says Mr Cordes, had an explicit cross-border element: they would have applied equally had the deal been between two German companies. The solution to post-merger integration, for instance, was to
Cross-border mergers are notoriously tricky. For DaimlerChrysler to succeed requires cohesion not just between two headquarters, in Stuttgart and Auburn Hills, Michigan, but also between a host of offices and factories with different national and corporate cultures. To overcome such differences, the merged company took an unusual approach.
In its pre-merger planning Daimler put little weight on the fact that the deal would be a cross-border one. Apparently, it assumed that this would create no special problems. According to Eckhard Cordes, one of three Daimler managers to take part in the pre-merger discussions with Chrysler (the others were Jürgen Schrempp, the group's chairman, and Jürgen Hubbert, a board member responsible for Daimler's Mercedes-Benz car division), questions raised by the deal's cross-border nature were not specifically asked until after its broad terms had been agreed.
Mr Cordes says that three big issues preoccupied the Daimler team. First, against a background of consolidation in the car industry, they were trying to put together two companies with strong and distinctive heritages, so how best could they do this? Second, given that there was no precedent for such a merger, was the deal at all feasible? And third, were Daimler and Chrysler bold enough to manage the difficult task of post-merger integration successfully?
None of these issues, says Mr Cordes, had an explicit cross-border element: they would have applied equally had the deal been between two German companies. The solution to post-merger integration, for instance, was to