Word: eatonized
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...kind of cute, actually, how they came to be an item: following some small talk last year over a possible joint venture in Latin America or maybe Asia, Juergen Schrempp, 53, chairman of doughty Daimler-Benz, invited Chrysler chief Robert Eaton, 58, to spend some quiet time alone during the crowded Detroit Auto Show in January. Schrempp said he liked Chrysler a lot and suggested that maybe they should consider going...
...been thinking about the same thing," replied Eaton, chairman of the once dented but lookin'-pretty-good-these-days American automaker. And so began a rapid courtship, replete with the 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...
Schrempp and Eaton boast of major cost-cutting opportunities. For 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...
...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...
Schrempp, who will succeed Eaton as DaimlerChrysler's chairman after the first three years, might be the kind of Mercedes executive who can bridge that gap and make this marriage work. A former apprentice mechanic, he arrived in Stuttgart in 1987 and made--and later unmade--an ill-fated deal with Dutch aerospace firm Fokker. He also did a stint at a Daimler division in Cleveland, Ohio. When Daimler fell deep in the red in the mid-'90s, he embarked on a series of American-style cost-cutting programs that reduced the work force by some...