Gojirra99

Mercedes isn't a restructuring candidate

Daimler Chrysler boss Jürgen Schrempp denies that Chrysler swallowed critical resources

Published 18 February 2005

Interview :

Mr. Schrempp, the downfall of Mercedes must hit you even harder than the crisis at Chrysler.
You should know the facts: Daimler Chrysler boosted its result to €5.8 billion. Our net profit is up 450 percent to €2.5 billion. Chrysler, financial services and commercial vehicles are doing very well. The contribution from our stake in aviation and aerospace group EADS is outstanding. Our balance sheet is in excellent health, our free cash flow exceedingly positive, and the Mercedes Car Group made a profit of €1.7 billion in 2004. Mercedes' cars still meet with an incredibly positive response. We have received numerous awards for the new M, A and CLS class cars. But of course we're also facing some challenges.


What happened to the Germans' favorite car, the Mercedes?
These days, the cars of all premium carmakers contain a lot of electronics, not only at Mercedes. And electronics cannot simply be bought and integrated into a car. We need to ensure smooth cooperation with our suppliers.

So you're blaming the others?
No. We're responsible for Mercedes. Our customers have a right to top quality, and they will get it.
Is Mercedes a restructuring case, as Wolfgang Bernhard, who almost became head of Mercedes, said and was fired for it?
How can that apply to a company whose products enjoy broad acceptance, which is the world market leader in the premium segment, which has a healthy substance and is an innovation leader? Still, our earnings level is unsatisfactory, but we're dealing with the problems.

Did you stand by and watch for too long?
The quality of all cars that leave our plants today is better than ever. This is something we've worked on continually over the past few years. We have taken measures to deal with some cars that are on the road but don't meet our high quality standards. Whatever we do we must do at benchmark level and with the aim of repositioning Mercedes as the No.1. That will cost money in the short term, but will pay off in the end.

Your results are accordingly weak.
I've said that we'll have to take a few more measures in 2005 but nonetheless we want to improve our result of €5.8 billion slightly. In 2006 and beyond, we should see substantially higher profits. And please don't forget: Without the weak dollar and the costs at Smart in 2004 the result of the Mercedes Car Group would have been markedly better in 2004. But, of course, we still wouldn't have been satisfied even then.

Is it possible that the massive quality problems at Mercedes are also caused by the restructuring at Chrysler?
What makes you think that?

You had to send your best managers and engineers to Detroit. That deprived the Mercedes team under Jürgen Hubbert of key resources.
That's rubbish. Nobody was pulled off Mercedes. And we never transferred any money to Chrysler either. On the contrary: Since the merger, Chrysler has contributed markedly more than €7 billion to the group's operating profit. Incidentally, the Chrysler Group, like all our other business divisions, exceeds our capital return demands. Which means it creates value.

If this is the case, don't we have even more reason to ask what Hubbert failed to do?
This question doesn't arise. Jürgen Hubbert is a total professional and a globally renowned automotive expert. His achievements at Mercedes are impressive. Especially his product offensives at Mercedes are a world-class achievement.

Nonetheless, the new Mercedes head Eckhard Cordes now has to launch a cost-cutting program.
No, a profit maximization program. Because we're not only looking at costs, but also at revenues. Eckhard Cordes has the right people and knows which levers to pull. You'll see tangible progress at Mercedes-Benz cars in the next twelve months.

Many people accuse corporate managers of focusing solely on profits.
I know most of the heads of the Dax-30 companies. Nobody thinks like that - nor do I, for that matter. And if you had asked me about jobs, I would have told you that Daimler Chrysler created more than 8,000 jobs in Germany last year while also boosting its economic value added. And if you had asked me about our social responsibility, I would have told you that we dedicate ourselves to the fight against Aids and support environmental projects around the world.

What, in your eyes, constitutes a good entrepreneur?
Somebody who manages to combine the different interests of all partners - a return on investment for shareholders, customer satisfaction, employment and everything I just told you about social responsibility. Our company is showing an excellent development here.

The interview was conducted
by Jürgen Dunsch, Rainer Hank and Henning Peitsmeier of the Frankfurter Allgemeine Zeitung.


source : faz.net

bitkahuna

iTrader: (20)

Talk about a hostile interviewer. EXTREMELY negative. I don't think DC is that bad off. Yes, the late 90s ML class was initially lame in quality and not luxurious but the whole line-up is coming back strong I'd say.

Vegassc400

Good interview. He mentioned that MB has never been better? Is he serious? They produce some gorgeous cars but when you spend that kind of money it had better do more than look good.

This quote was interesting. He claims his sole focus is not profit but he mentions profit more than twice the number of times he mentions quality. I wonder what he's thinking about?

mmarshall

Yes...but he obviously was hostile for a reason. Schrempp is double-talking the exact SAME line of bulls - - - that Lee Iacocca talked 25 years ago ( I don't know if you are old enough to remember that...I am ), only unlike Iacocca, he is not shrewd enough or a smooth-enough talker to get people to actually BELIEVE him. For years Iacocca talked quality and delived junk.....never acknowledging the fact that it WAS junk. That is why Hyundai improved so vastly so quickly.....unlike Iacocca, Schrempp, and other CEO's who cannot or simply will not admit their company's problems, Finbar O'Neal, when he ran Hyundai, said " We're not only going to TALK quality....we are going to DELIVER IT. We're going to make this a respectable company ". Hyundai's employees, contractors, reps, and managers believed him because they KNEW he was telling the truth....he MEANT IT. The rest, of course, is history.
Too bad he did not accomplish the same over at Mitsubishi.

jracerlmn

all i have to say is that Mercedes-Benz is still the #1 luxury nameplate in the world, but it's losing it's ****ing shine real fast. I'm becoming less and less happy with the cars.

(which doesn't explain why i'm buying new ones)

mmarshall

I'll explain why in three short sentences............................

1. You've got money.
2. You're living in the past.
3. You're reluctant to switch because of product loyalty.

How can I say this? Simple. I have been in your shoes.........and learned from it.

SecPole14

That's not a bad thing. Investigative/activist journalism is pretty much dead, so it's refreshing to see an interview like this. Better than most American publications, which read like company press releases. Besides, the big boys SHOULD be grilled and held accountable for things, especially Mercedes. They have kept succeeding financially, but the past decade has not been kind to the company in numerous respects.

I'd be willing to say that for the 18-35 crowd, Mercedes no longer has that "ultimate" aura about it. And they have no one to blame but themselves.

mmarshall

What happened was that in the 1980's BMW started getting the sport-oriented and "Yuppie" luxury-car buyers, in the 1990's, Lexus, and to a lesser extent, Infiniti and Acura, started getting the people interested in quality and refinement, and more recently, Audi has been getting some more of the sport-oriented crowd. So Mercedes has been losing both customers and market share for several reasons. Much has been written of the notorious drop-off in Mercedes quality.....and I won't rehash all of the reasons why.......we have already discussed that. But the drop-off in quality has affected many European nameplates, not just Mercedes. The only European nameplate sold in America that still has even average reliability records in general across the board is Saab.
The new BMW 7-series, in particular, has been a disaster....as has the M-Class Mercedes for several years.

jracerlmn

1. true
2. nahhhh i'm not living in the past...i'm way too young to do that
3. only because i get ridiculous deals on the cars

SecPole14

And I'm sure they all know a lot about cars, too.

Britney Spears =*****ible "singer," Ben Affleck = horrible "actor," Chris Rock = horrible "comedian." What's your point again?