Word: daimler
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...secret rendezvous (London, Frankfurt) and code name (Operation Gamma) that lovers and business executives are wont to employ. The result, the largest industrial marriage in history, takes what had been the world's No. 6 car company, Chrysler, and stuffs it into the trunk of erstwhile No. 15 Daimler-Benz, to produce the planet's fifth biggest automobile concern. The new combine, valued at $40 billion, will generate $130 billion in sales and employ more than 400,000 people...
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...
...example, the two 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...
Earlier this year, Chrysler stunned audiences with the Chronos, a conceptualized superluxurious, Euro-styled touring sedan with a V-10 engine. It's a dream for Chrysler--too expensive for the company to produce alone. Daimler's deeper pockets, though, could support such a program. "Daimler has been lacking the potential for growth, but it has the cash flow," says Andre Igler, industry expert and editor of Vienna's business daily Wirtschaftsblatt. "Chrysler has the potential for growth but no real cash flow...
...Stuttgart, Daimler Workers Council representative Jurgen Hesse was more cautious: "When a capitalist enterprise undertakes a move like this, it wants to save money. And that can mean cutting back on jobs. We can't say yet where the pressure will be felt...