Schrempp Out, Zetsche In, At DaimlerChrysler

29 July 2005

The long awaited implosion of the top management structure at German-American automaker DaimlerChrysler was triggered Thursday by the resignation of ceo Jürgen Schrempp.

In royal manner, he is said to have anointed his successor and close associate Dieter Zetsche, head of the group's US division, Chrysler - which in turn prompted the resignation of Mercedes' highly ambitious boss Eckhard Cordes.

It is thought that the DaimlerChrysler board has asked Cordes to reconsider his decision.

Schrempp's departure, officially at the end of this year, was welcomed by the German financial establishment which has never forgiven his acquisition in 1998 of Chrysler, America's third largest carmaker, bringing about a 70% collapse in Daimler's market capitalisation.

Their joy at the ceo's exit was marked by an 8.7% rise in the group's share price. But not everyone is convinced that Schrempp's going will resolve DaimlerChrysler's problems.

"It is good for sentiment but is it good for the fundamentals? I'm not sure how big a change Zetsche can make," opines Sanford C Bernstein analyst Stephen Cheetham.

Data sourced from Financial Times Online; additional content by WARC staff