Dieter Takes Charge - Dieter Zetsche to take helm of DaimlerChrysler Corp - Brief Article

Automotive Industries, Dec, 2000

Achtung! The Germans are coming! In the wake of Juergen Schrempp's latest executions in Auburn Hills, Mich., Daimler is sending over a team of managers to accomplish the gritty task of making the company cost-competitive again. They'll do the job that Jim Holden was supposed to do, but didn't. You can bet your bratwurst on it.

The way some local pundits are calling it, you'd think an alien force is preparing to strike Detroit. When the headline of a recent newspaper article trumpeted "24 Germans to Arrive," I envisioned a remake of that old behind-enemy-lines WWII flick, The Dirty Dozen. Except this time it's The Dirty Two-Dozen, an action thriller about an elite squad of 24 purchasing experts from Stuttgart, Germany, who parachute out of an Airbus into beleaguered Auburn Hills. Ultimately they save the automaker and win the nod from Standard & Poor's. End of fantasy.

Why do Americans still make such an issue of the fact that Chrysler is the U.S. subsidiary of a German company? "It's part ego, part sentiment," asserts my friend Mike, who works at Mack muck, itself owned by Renault since the 1980s. "We're the ones who have pushed globalism on the world, yet we don't want to accept the French, Germans, or whomever running our companies."

If you want to succeed in a globalized company, Mike notes, you simply accept that somebody in Europe ultimately calls the major shots Now it's time for Dieter Zetsche to call the shots and get on with the serious business of fixing Chrysler.

I first met Zetsche when he was assigned to overhaul Mercedes' S-Class program a decade ago. His predecessor had been banished to the equivalent of the Russian Front for allowing the flagship sedan to grow absurdly overweight and over cost. Zetsche put the program back on target. He also helped steer Freightliner into its heavy-truck preeminence.

Zetsche deserves respect. He approaches challenges like the astute manager and engineer that he is. That's a valuable attribute, because Chrysler has lost so much that it must now recover with his leadership. Most of all, it needs a pipeline full of exciting new products. Chrysler squandered the advantage it enjoyed in the early 1990s when it had the industry's best minivan, best unibody SUVs and the most stylish trucks. Now everybody has such vehicles, and many of them are better than Chrysler's.

Chrysler must whack at least $1,500 per vehicle out of its cost structure, as former Vice-Chairman Bob Lutz told me in an interview two months ago. It needs a new small car to balance the CAFE debt. The Neon will not be reprised as a wholly U.S.-designed model, because Stuttgart will not fund over $2 billion for a program that only musters around 200,000 units. So DaimlerChrysler will tap its Asian resources for a new platform, possibly a Hyundai I'm told.

Other suggestions for Dr. Zetsche: Don't bother with Chrysler-brand international sales until North America is back in shape. Make sure your new German managers get used to life without their large German support staffs. Trust the female managerial talent that's abundant in your facilities but sorely lacking in German businesses. And embrace good public relations. The period since Daimler's takeover has been one PR disaster after another -- the S&P 500 lapse, Tom Stallkamp's firing, endless defections, Schrempp's shameless deceit, etc.

These days the Chrysler Tech Center's like a funeral parlor. When I worked there five years ago, the place was rockin' with enthusiasm. Bringing back that aura is perhaps the most fundamental task for Dieter Zetsche. If he can't do it, even an Airbus full of Germany's sharpest pencils won't help him sustain a return to black ink.

Lindsay Brooke is editor-in-chief of Automotive Industries