- The Washington Times - Monday, December 4, 2000

On the two-year anniversary of "day one," the exciting day in which DaimlerChrysler began trading as a combined entity of the New York Stock Exchange, the Germans took over forcefully and explicitly. The "merger" between Daimler and Chrysler is now clearly the takeover of one company by the other that it always was in fact with all that implies.

Many Chrysler executives say that they were shocked by recent newspaper reports that DaimlerChrysler Chairman Juergen Schrempp said that DaimlerChrysler was never meant to be a merger of equals; rather, it was portrayed that way "for psychological reasons." The maneuver was tremendous marketing and public relations coup that dissipated most of the objections and potential resistance to the acquisition of Chrysler that might otherwise have spoiled the deal.

But today, the independence of the U.S. operation and even the future of Chrysler as a distinct brand is in play a possibility made clear by last week's exit of James P. Holden, formerly the top man at DaimlerChrysler's U.S. unit. He lasted barely one year.

The turning point came shortly after Mr. Schrempp learned from industry analysts that seven North American assembly plants were idled to help shrink growing inventories of slow-selling models at Chrysler dealerships in the U.S. He angrily wanted to know why Mr. Holden hadn't told him, according to Der Spiegel, the German magazine. Mr. Holden was summarily given his walking papers last week after being called to Stuttgart.

Mr. Holden's replacement is Dieter Zetsche. Mr. Zetsche, a confidante of DaimlerChrysler Chairman Juergen Schrempp, has a long track record of turning around failing operations, but he will have his work cut out for him. The Chrysler side of DaimlerChrysler is bleeding red ink. Whether a turnaround in the company's fortunes can be engineered is anyone's guess but the circumstances today are far from what they were two decades ago, when Lee Iacocca was at the helm. In 1980, Chrysler was fighting for its survival. Today, Daimler A.G. is fighting for its profitability. Two very different and perhaps mutually exclusive things.

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