Daimler Without Chrysler
October 4, 2007
The formal vote to adopt the new name Daimler AG, or Daimler Inc., on Thursday ended what was once billed as a "marriage made in heaven" between the German luxury carmaker and US firm Chrysler.
The 1998 merger, which was part of a project by former CEO Jürgen Schrempp to turn the Stuttgart-based company into a global concern, has plagued Daimler for years.
As a result, the Mercedes makers sold 80.1 percent of Chrysler stock to the US investment firm Cerberus in August, recouping $7.8 billion (5.5 billion euros) of the $36-billion merger.
The ups and downs of separation
The separation comes with a price tag, however: Daimler officials are set to reveal a new company logo after Thursday's vote and said they will swiftly replace the old signage at sites around the globe at a cost of several million euros, according to reports.
At the time of the sale, company officials had said that the change would carry a total cost of 2.5 billion euros this year.
According to reports, some 40,000 Chrysler workers lost their jobs between 2000 and 2005, and before selling Chrysler, the company announced 13,000 further job cuts by 2009. At Mercedes, some 14,500 jobs were eliminated after restructuring in 2005.
Since July, DaimlerChrysler shares have risen by more than 15 percent, reportedly turning the company into one of the best performers on the Frankfurt Stock Exchange.
But what about Benz?
Not all shareholders seem to be happy with the new name and some called for a return to "Daimler-Benz," the company's name from 1926, when firms founded by car inventors Gottlieb Daimler and Karl Benz merged.
"Daimler AG sounds cold and unfeeling," said Paul Russmann, the spokesman for shareholders opposing the move, according to AFP news service. "Daimler-Benz AG sounds familiar and warm."
DaimlerChrysler CEO Dieter Zetsche meanwhile told shareholders on Thursday that the company was not planning to forget about Benz, adding that the company's flagship cars would still be called Mercedes-Benz.
"The proud name of Benz will not only remain prominent, it will have significantly higher visibility," Zetsche said.