DaimlerChrysler Future

The German-US auto giant officially confirmed on April 4 that it is in talks to sell Chrysler amid growing pressure from shareholders. It has been nine years since the world's fifth bigger carmaker was formed through a 27-billion-euro ($36-billion) merger of Daimler and Chrysler. Last year Chrysler posted an operating loss of 1.12 billion euros ($150 billion).

Former CEO Jürgen Schrepp called the merger of Mercedes-Benz and Chrysler "a marriage made in heaven" in 1998, but was it ever a good idea?

Today we can see that it was a failed experiment. They never managed to use common parts and components. Over the last nine years they have really been separate companies which functioned under one holding entity. It's really no surprise that DaimlerChrysler will sell Chrysler because the division has serious economic problems and it has no links to the other parts of the company.

Could it have been possible for the two companies to share more of their manufacturing?

The question is: could you use the same platforms and components for a premium car as for a car manufactured at higher volumes? We know that it's possible in the industry. Look at Toyota for example -- they have the premium Lexus brand and the mass-market Toyota cars. These two brands share 80 to 90 percent of their components. Even Porsche and VW use common components. The Porsche Cayenne is in principle the same car as the VW Touareg (SUV). So it is possible to have commonalities between premium and high-volume cars, but DaimlerChrysler just didn't do this.

Why not?

The philosophy and the management styles of the Swabians and the Americans are rather different. The Mercedes-Benz people are very proud and don't communicate much with the Americans and the same applies to Chrysler. Chrysler felt that if they used Mercedes parts their cars would be too expensive and Mercedes said that if they used Chrysler parts the quality and the exclusivity of Mercedes cars would be lost. Therefore they didn't cooperate.

How much of a problem is it for Chrysler that they don't make small, economical cars that are cheaper?

At the moment it is a big problem, because Chrysler has only concentrated on the US -- 90 percent of their cars are sold on the US market. Chrysler is in line with General Motors and Ford. All three companies have big problems due to the fact that they are offering a lot of gas-guzzlers in the US, like SUVs and pick-ups. What we have seen is that consumers have changed their minds and are opting for more fuel-efficient cars and that is a problem for Chrysler, as well as Ford and General Motors, that they have to solve. That will take time.

Do you think DaimlerChrysler will sell Chrysler?

Yes, I think they are preparing to sell. They have been in conversation with various investment companies and I think in three to six months it will be sold to one of these groups.

If Chrysler is so unsuccessful, why would anyone want to buy the company?

At the moment we haven't seen a carmaker interested in buying Chrysler -- the company in its present form would be difficult to continue successfully. It produces less than three million cars per year and so it doesn't have strong economies of scale in its production. So it's more a question of looking at who could use parts of the Chrysler Company. Financial investors go into companies, break up them up and sell the successful parts. For example the supplier business -- the component productions and the press shop and these parts could be sold and purchased by other suppliers. Brands could also be sold -- Jeep is a very successful brand, others like Dodge and Chrysler itself are weaker. They may be sold, for example to Chinese carmakers who are strong and looking to capture the American market.

CEO Dieter Zetsche was a hero at DaimlerChrysler for a while because of the success of his restructuring program in Detroit, although some of the gains he made have not lasted. Do you think will stay on as CEO?

I am very sure that he will continue as CEO of DaimlerChrysler. We can see now that Zetsche hasn't taken one false step in his two years as DaimlerChrysler CEO. He started to fix the quality at Mercedes and now they are coming out with new products, such as the E-class. Currently the C-class has been very successful in some markets, like Germany. Zetsche is the guy who started thinking about the future of Chrysler and the future of Mercedes and he started the process of talking to other parties about selling Chrysler. So he has done everything necessary to bring the group back to profit, so from my point of view there is no reason to change management.

Shareholders have been very unhappy about the company's performance. Will they be more optimistic now that a sale of Chrysler is likely?

I think they can be very optimistic for the future because we think Chrsyler will be sold in a few months. Then they will be left with a group which consists of Mercedes trucks, which is very strong; it's actually the global market leader. Then we have Mercedes cars which is becoming stronger and stronger. By 2009 or 2010 the new E-class will be released and that will be very important for their profitability. They also have a strong financial services arm which is very successful. Because of these three successful parts we will see stock prices continue to increase, as will the group's profitability.