Word: chryslers
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Specifically, Iacocca's Global Motors was to be an alliance of Chrysler and Volkswagen (or Fiat or Renault if VW didn't want to play), with American Motors thrown in to make trucks and utility vehicles. American-designed cars would run on German (or Italian) engines, and joint dealerships around the world would be able to match the market penetration that only GM and Ford had at the time. It was one of Iacocca's typically brash ideas...
Together, Daimler and Chrysler have a good product and market fit, filling in each other's weaknesses. Because of its dependence on North American sales, Chrysler needs greater international exposure for its products. And Daimler could stand to broaden its Mercedes product line with more mass appeal. But how that will play out beyond theory is still unclear...
...companies combined spend $7 billion on R. and D. every year. Much of the money that goes into research on, say, safety or fuel-cell technology can be put under one umbrella for savings. Economies can also be extracted from joint purchases of raw materials. "Daimler and Chrysler will maximize the number of common parts they're using for their cars," says Christian Breitsprecher, a Dusseldorf-based industry analyst. "Engines, engine control systems, transmissions, door locks, seats--you name it." As Eaton insisted to TIME, "There's $100 million of savings the first year on current product...
...sounds, given the stylistic differences between Mercedes and Chryslers, one half of the company can help the other half design cars. For example, it's no secret that Mercedes badly wants a minivan for Europe. Chrysler, with 15 years' expertise in that market, could co-design a platform for a luxurious minivan that its partner could sell in Europe, saving money and adding sales. "They had a minivan going that they won't do now," says Eaton. That is only one of many planned savings, he says, "but we don't want to talk about our product plans right...
Getting new cars out the door in a hurry into hot market niches is one of Chrysler's strengths. It comes from the company's design-driven managers, and from the company's inordinate reliance on outside suppliers. Mercedes engineers everything but the screws from the ground up, one reason it took years to develop its M-Class sport utility vehicle. Scrappy Chrysler could teach it how to develop and roll out in a more timely fashion a superluxurious SUV to compete against the popular Lincoln Navigator...