Dieter Zetsche became a local favourite around Detroit in the five years he ran Chrysler. Photograph: Kandschwar
By Mark Phelan
Dieter Zetsche loved the five years he led Chrysler, but said he had to dissolve DaimlerChrysler to keep the acquiring German company from being dragged into bankruptcy by its American half.
“It was the best time of my life, the five years I was with Chrysler,” the Daimler CEO said in a recent interview during a ride-and-drive north of Toronto in the new 2014 S-class sedan. “Detroit is such a great place to live. I loved being there, and my family did, too. The people were wonderful.”
The business result, however, was less than successful. Chrysler retirees and workers who lost jobs during and after Daimler’s reign, may lay more blame at the doorstep of Cerberus Capital Management, the private equity firm that bought the Auburn Hills company in 2007, just as the US economy began its nosedive.
But Daimler never made the deal work. In less than two years after Zetsche’s former boss Juergen Schrempp charmed then-Chrysler CEO Bob Eaton, the combined company was worth less than Daimler-Benz was before the deal happened.
Even so Zetsche became a local favourite around Detroit in the five years he ran Chrysler. His bushy mustache, self-effacing humour and declaration that “I’m a Chrysler guy,” made him a favourite in a town that loves executives who can strip an engine.
“Dr Z” became a character in Chrysler ads, and Zetsche, the German PhD with a gearhead’s heart, was a popular fixture on Michigan’s business and charity scene. He grilled burgers and served beer when Mercedes-Benz took over the Washington Boulevard fire station during Auto Show week.
That made it all the more bitter for Detroiters when Zetsche effectively put Chrysler up for sale by declaring “all options are on the table” on Valentine’s Day 2007, after a $1.5bn loss in 2006.
The lean German and adopted Detroiter looked as miserable as anyone on Chrysler’s side of the deal that morning in Auburn Hills, Michigan.
“It was the toughest day of my life, the day I went to Detroit and told my colleagues,” Zetsche told me. “I was extremely grateful for the reaction of my colleagues (at Chrysler) who showed understanding for the decision which was much more than I expected or was hoping for.”
The deal initially billed as a “merger of equals” and “a marriage made in heaven” fell apart at least in part because the companies never had a plan for how to work together. That’s the key difference Zetsche cites from Daimler’s current agreements with Renault-Nissan, which include shared manufacturing and joint development of engines and vehicle platforms.
Those were all off-limits at DaimlerChrysler. Many mid- to upper-level managers seemed more intent on making sure Mercedes’ name was not sullied by association with Chrysler, Dodge and Jeep than finding ways both sides of the company could work together. Since then, Mercedes has learned how to work with companies and individuals with different cultures from Daimler, Zetsche said.
“The sequence is different now,” Zetsche told me. Daimler and Renault-Nissan “found two or three areas where it made sense to co-operate” before committing to a relationship.
“It’s on-demand. We are independent companies whose strategies align in some areas,” Zetsche said.
Joint projects so far include a platform for the next generation of the Smart city car and engines for a variety of vehicles.
Mercedes went through its own problems in the six years after Daimler sold Chrysler. It shut down its Maybach ultra-luxury brand, saw other luxury brands replace it as the global leader and continued to lose money on its Smart city-car brand.
Finally back in growth mode now, the Stuttgart-based company, is expanding in the US and China, and will soon launch new cars at opposite ends of its model line.
The new S-class arrives first. For decades, Mercedes’ biggest car set the tone for the whole brand, and often the entire auto industry. The 2014 S-class comes closer to driving itself than any previous production vehicle, and boasts flourishes like heated-touch massaging seats and electronically controlled air fresheners. Equally important, Mercedes will launch several new compact cars to attract new customers and boost sales.
“The percentage of compact cars in our total sales will grow significantly,” Zetsche said, “Our growth will be driven by our new family of compact cars.” The CLA compact sedan arrives this autumn, followed by a CLA 45 AMG tuned by Mercedes’ legendary performance group. The boxy and practical B-Class electric vehicle comes next, then a small SUV called the GLA.
“Being the best-selling luxury brand isn’t our primary goal,” Zetsche as the 2014 S-class steered itself through a picturesque resort town. “But if we build the best looking, most exciting cars, it is a natural result.” — Detroit Free Press/MCT
Gender affects
car-shopping
decision: survey
By Catherine Green
Women are more likely to prioritise safety and affordability in shopping for cars, while men appear to seek out cars based on exterior styling and “rugged” reputations, according to an online survey.
Researchers from auto information company Kelley Blue Book collected online surveys from 13,000 US adults who visited KBB.com between January and June. The site offers insights on car pricing and reviews. Surveys were anonymous and linked to responders’ online shopping data.
“Like comparing apples to oranges, men and women have different factors of importance when choosing a vehicle, influencing their brand research based on qualities that matter the most to them,” said market intelligence manager Diana Duque-Miranda.
She noted older men typically gravitated toward “heritage” brands they grew up with — Lincoln, for example, and Buick.
Search data showed 76% of women in the study sought out safety features in their next new car purchase, compared with 61% of men.
That surprised Arthur Henry, another Kelley Blue Book manager. “When I think of solid cars, I also think of safety,” a priority analysts found more often in women’s searches.
The survey data showed men tended to gravitate toward models considered “rugged,” Henry said. Twenty-eight percent of men were more likely to shop for such vehicles, compared with 19% of women, he said.
Duque-Miranda noted women were more likely to seek out features once considered luxury — such as leather seats, USB ports and parking sensors — that are now becoming standard in lower-priced vehicles. Fuel efficiency also ranked high among 67% of women, compared with 48% of men.
So how did brands fare in the battle of the sexes? Lincoln, Audi, Jaguar, Scion and Cadillac topped the list of 10 makes most likely to be sought out by men. Women were more likely to browse options from Volvo, Infiniti, Fiat, Acura and Nissan.
The study’s analysts said they thought these findings might be self-reinforcing when it comes to future buyer behaviour.
“I don’t know that shoppers are aware of these priorities,” Henry said.
“The separation may become bigger. Once something is labelled, consumers tend to go that way. If you say, ‘This is a man car,’ men will say, ‘Yeah, I’ll go with that,’ while women shy away — and vice versa.” — Los Angeles Times/MCT
