DaimlerChrysler chief executive Juergen Schrempp, who spearheaded the German-American merger of Daimler-Benz and Chrysler in 1998 but struggled to make the combination consistently profitable, will resign at the end of this year, the automaker said today. He will be replaced by Dieter Zetsche, the German manager who engineered a turnaround at the company's Chrysler division, which sank deep into the red soon after the merger. Chrysler will now be headed by the American Tom LaSorda, informs The New York Times.
According to Forbes, in a letter to employees, Schrempp said that "through our brand and product portfolio and our presence in more than 200 countries, we are uniquely positioned. Profits have risen steadily and we are on the way to reaching the goals set under my chairmanship."
"In view of this positive development, the board of directors of DaimlerChrysler and I agreed that the end of 2005 would be the best time for a change in leadership of the company."
Schrempp said during a conference call that he was leaving in good spirits.
"All in all I am satisfied with the advances made," he said. "Clearly DaimlerChrysler is not yet where it wants to be, although I am sure it will arrive. We are heading precisely in the right direction."
Some investors have criticized Schrempp because the company's stock price has lagged since the merger. Comments he made about the deal in a newspaper interview also led to investor Kirk Kerkorian suing the company over the terms of the deal, a suit the billionaire lost earlier this year.
DaimlerChrysler stock had been the worst performer in the DJ Stocks European car sector index this year, lagging peers by some 11 percent.
Traditional cash cow 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 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 and restore an operating margin of 7 percent by 2007.
The company said it 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, reports Reuters.
Twenty years later, the cause of death of 118 Kursk submariners remains a mystery. the Russian navy was unable to save the dying men.