|
Car bosses in unison
|
 |
February 1, 1999: 10:40 a.m. ET
DaimlerChrysler chiefs warn rivals of merger difficulties
|
DAVOS, Switzerland (CNNfn) - DaimlerChrysler's two top bosses presented a united front to the world Monday, but they sounded a warning to rivals about the pitfalls of mergers.
"Beware of the egos of chief executives," warned Chairman of the Management Board Juergen Schrempp.
"Some (international) mergers will fail, there will be disappointments," cautioned Chairman and Chief Executive Robert Eaton, who added that "We are the first, so we will be the benchmark," for global automotive consolidation.
Eaton and Schrempp stressed the global car industry was entering a very difficult period, but maintained the newly-formed DaimlerChrysler was well placed to weather the downturn.
Eaton pointed out the world automotive industry has the capacity to produce 74 million cars a year, but the current market equals only 52 million cars.
"The customers simply aren't there," he said, pointing out that only about 10 of the 40 global manufacturers are earning more than the cost of their capital.
Schrempp laid out his vision of how the new company would develop to an audience of journalists and business leaders at the World Economic Forum in Davos, Switzerland.
He underlined the rationale for the creation of DaimlerChrysler, and predicted a bleak future for smaller players.
"A global auto company must offer a full range of products…there will be less and less and less opportunities for niche companies," he said.
The two executives gave an insight into the difficulties they face in making their own enormous transatlantic merger work.
Eaton acknowledged the likelihood of turf battles further down the company's ranks, and said the senior executives alternated their weekly meetings between Michigan and Frankfurt.
Daimler merged with Chrysler last year in a $37 billion deal that has spawned the world's third-largest automaker. Since then, a number of auto deals have been discussed -- and a few -- such as last week's merger between Ford Motor Co. (F) and Volvo, have been announced. 
|
|
|
|
|
|
DaimlerChrysler
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
