Daimler-Benz and Chrysler merger
- Quantitative analysis of Chrysler's operating performance for the years 1998 - 2007
- Why do Chrysler's post - 1999 problems have taken management by surprise?
- Critical examination of the different measures taken by Chrysler's managers
In 1998 Daimler-Benz and Chrysler merged to become DaimlerChrysler, a leading carmaker group that was supposed to benefit from significant synergies between the two companies. Actually this industrial combination aimed at preserving, strengthening and expanding the different brands of the former German and American manufacturers on a global scale. The USD 36 billion deal took place in an industry characterized by a large consolidation trend at the end of the 1990's when both companies were looking out for new markets and opportunities. Chrysler seemed to be an ideal target for Daimler-Benz due to its specific product line made up of minivans, sport utility vehicles and pickups that were particularly successful in the North American market. Chrysler's financial results had lowered the performances of the group for a decade as a result of which Daimler decided to sell a major stake of its weak partner in 2007. Indeed the US carmaker went through a severe financial crisis rapidly after the merger that prevented the newly formed group from obtaining the expected results from the combination. First we will focus on Chrysler's operating performance and issues faced between the years 1998-2007. Then we will highlight the post-merger problems that the US car manufacturer had to face and finally we will critically examine the timeliness, relevance and effectiveness of the measures taken by Chrysler's managers.