Your Source for Up-To-Date News and Research on the Collision Repair Industry
click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email
SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor
Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide
Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...
Feedback
Letter to the Editor
Thursday July 28
Schrempp to Step Down at DaimlerChrysler
DaimlerChrysler's Chief Executive Juergen Schrempp, who shepherded Daimler-Benz AG through its historic merger with Chrysler Corp. in 1998, will step down at the end of this year and will be replaced by Chrysler group CEO Dieter Zetsche. Schrempp, 60, will leave his position effective Dec. 31. Chrysler COO Tom LaSorda will succeed Zetsche, 52. Chrysler's research and development chief, Eric Ridenour, will replace LaSorda."The Supervisory Board and Prof. Schrempp are in full agreement that the end of the year 2005 is the optimal time for a change in the leadership of the company," said Hilmar Kopper, chairman of DaimlerChrysler AG's supervisory board. "The decisions of the supervisory board have been made unanimously after a thorough process."
Zetsche was seen as one of two DaimlerChrysler insiders most likely to succeed Schrempp. Eckhard Cordes, who was named Mercedes-Benz AG chief last year, was also seen as a strong candidate, and many inside sources had named Cordes as the expected successor. Cordes is a longtime Schrempp ally who fixed the group's vast commercial-vehicle operations.
Zetsche had opposed Schrempp's lobbying in 2004 to keep providing money for Mitsubishi. Daimler's board subsequently cut off additional financial support in April 2004.
Zetsche, who helped turn around the number-three U.S. automaker at a time of ferocious competition in North America, was named Automotive News Industry Leader of the Year for 2005 and has been named the newspaper's top CEO for North America for two consecutive years.
"(Schrempp) has left voluntarily after a dialogue with the supervisory board," a spokesman said Thursday, adding that Schrempp had proposed Zetsche as his successor.
Although Schrempp's contract runs until 2008, he will only draw his salary until the end of this year, the spokesman said.
Zetsche gets a five-year stint as group CEO.
The unexpected news came as DaimlerChrysler reported that its second-quarter operating profit fell 20 percent to 1.67 billion euros ($2.02 billion), beating expectations. The world's fifth-biggest carmaker reiterated on Thursday its forecast for slightly higher 2005 operating profit excluding restructuring costs for its loss-making Smart minicar brand.
Instead, Mercedes posted a 12 million operating profit despite an extra 311 million euros in charges to restructure Smart. U.S. arm Chrysler, sucked into a North American price war with rivals General Motors and Ford, saw operating profit gain four percent to 544 million euros, also above analyst estimates of 412 million.
Usually strong Mercedes has been grappling with the strong euro, model changeovers, spending to fix quality problems and hefty losses at Smart. Its first-quarter operating loss of 954 million euros marked its first red ink since 1993.
The profit collapse prompted a new efficiency drive that aims to boost earnings at the division by more than 3 billion euros and restore an operating margin of 7 percent by 2007. The company aims to improve Mercedes earnings by up to 3.5 billion euros.
DaimlerChrysler's market-leading commercial vehicles business turned in another strong quarter amid a truck boom, especially in North America.
©2005 Collision Repair Industry INSIGHT
All Rights Reserved
FEATURED
LINKS:
INSIGHT Supports the NABC!
Do You?