Its culture, ownership and profits mostly
German
February 28, 2001
BY JAMIE BUTTERS
and JEFFREY McCRACKEN
DETROIT FREE PRESS BUSINESS WRITERS
STUTTGART, Germany -- DaimlerChrysler AG
Chairman Juergen Schrempp, deeply tanned and
wearing a dark suit, strode calmly toward the stage
Monday while techno music thumped and a gigantic
screen showed clips of the company's triumphs in
2000.
But it wasn't a day for triumphs.
Earnings are down. The company's stock is down.
And members of the media kept asking Europe's
most prominent business leader if his job was on the
line.
"Why are you asking me?" he responded with
disgust.
No one sentences himself to only one last chance,
he said in German.
Everything he said was in German.
For the first time since Chrysler Corp. merged with
Germany's Daimler-Benz AG, the six men who run
the company and sit under the shiny white panels of
DaimlerChrysler's Event Center were all Germans,
speaking German.
It was all instantly translated into six or seven
languages, but it emphasized what Chrysler Group
workers in the United States have known for a long
time: This is a German company. Mostly owned by
Germans and run by Germans. And it is German
profits that are keeping the company in the black
these days.
It didn't start out that way.
When the companies combined in 1998 in a
$36-billion deal that created the world's fifth-largest
automaker, American shareholders were the biggest
owners of the conglomerate.
Although much smaller in size than its German
partner, Chrysler would provide just more than half
of the merged company's profits in its first full year.
Officials stressed the company would have dual
headquarters in Stuttgart and Auburn Hills and
English was declared the official language of the
company. Not any English dialect, either. American
English. Schrempp created a stir in Stuttgart when
he mandated that all company memos, letterhead
and interoffice mail use American-style English, as
opposed to British-style English -- no "colour" or
"centre."
All of the semiannual meetings and two annual
shareholder meetings since the merger were
conducted in English. And there were American
officials on the dais.
Chrysler Group spokespeople said conducting
Monday's semiannual business meeting in German
was just a matter of convenience.
"It was in Germany and a majority of those attending
were German," said Jodi Tinson. English remains the
company's official language."
Nevertheless, the use of German and the makeup of
the company's top brass reflect the fundamental shift
that has occurred at the company.
At the time of the merger, U.S. investors -- mainly
mutual funds, pensions and individuals -- owned 44
percent of DaimlerChrysler's stock, compared to 40
percent by German investors.
Shortly after the merger, however Standard &
Poor's in New York dropped DaimlerChrysler
from its S&P 500 index of 500 widely held U.S.
companies. Its reason: DaimlerChrysler was a
German company.
The company was incorporated in Germany and the
majority of its employees were located outside the
United States.
Within months, U.S.-based mutual funds and
pensions that purchased S&P 500 stocks dropped
DaimlerChrysler. By March 1999, U.S. investors
owned just 25 percent of DaimlerChrysler. German
investors, meanwhile, controlled 60 percent of the
company.
Today, the percentage of U.S. ownership is down
to 17 percent. The company doesn't have a figure
for German ownership, but European ownership is
at 75 percent and most of that is figured to be
German.
In 1999, profits were mostly from the United States
as well.
Adjusted operating profits in 1999 for the Chrysler
Group were $5.22 billion. For the rest of
DaimlerChrysler -- including Mercedes-Benz,
Freightliner commercial truck division, aerospace
operations and financial services -- operating profits
were $5.1 billion.
In other words, Chrysler provided more than half
the company's profits.
The financial picture for 2000, detailed Monday,
was vastly different.
Chrysler Group profits were a relatively paltry $470
million, while the rest of the DaimlerChrysler's
businesses made $8.7 billion.
Chrysler provided roughly 5 percent of the German
company's profits, even though it comprises 42
percent of the company's sales.
At the time of the merger, a group of German
stockholders fought the merger because they
believed that the old Daimler-Benz would lose its
German identity. They were especially upset
because English would become the merged
company's language.
Germans might use the word "fehler." Americans
would use a different word: "irony."
Contact JEFFREY McCRACKEN at
313-222-8763 or mccracken@freepress.com.
--------------------------------------
Steven St.Laurent
Test Engineer
Test Branch, GSD, MCTSSA
MARCORSYSCOM, USMC
(Work) 760-725-2506 (DSN: 365)
(Work) mailto:stlaurents@mctssa.usmc.mil
(Home) mailto:saint1958@home.com
"In fact, my work has already proven
itself to be correct. People such
as you just haven't gotten it yet.
(unknown author)
-----Original Message-----
From: H62300@aol.com [mailto:H62300@aol.com]
Sent: Wednesday, February 28, 2001 12:54 PM
To: dakota-truck@buffnet.net
Subject: Re: DML: Earthquake - Major - Seattle
Damage at the airport, various bldgs damaged, mud slides, smashed cars.
There may be some injuries and maybe
a collapsed elevator at the Olympia hotel in Olympia. People missing and
damaged highways. Looks like overall things are not
too bad. We just go on here.
Brian in Seattle
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