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According to this note, released today to DCX employees, Chrysler is down to a single member of the DaimlerChrysler board.
Stuttgart-Moehringen, January 31, 2003
DaimlerChrysler: Changes in the Board of Management
The Supervisory Board of DaimlerChrysler AG made the following decisions today:
The contracts of Dr. Eckhard Cordes, Member of the Board of Management responsible for Commercial Vehicles, and Dr. Dieter Zetsche, Member of the Board of Management responsible for the Chrysler Group, are extended for five years, effective December 16, 2003. Their respective areas of responsibility remain unchanged.
The contract of Dr. Manfred Gentz, Member of the Board of Management responsible for Finance & Controlling, is extended for another year, effective December 16, 2003. This decision was made in accordance with the DaimlerChrysler policy that contracts of members of the Board of Management over the age of 60 can at any one time only be extended for one year.
The contract of Thomas W. Sidlik is extended for five years, effective December 16, 2003. At that time, he will assume additional responsibility for Global Procurement & Supply. There will then no longer be a member of the Board of Management responsible only for Chrysler Group Procurement & Supply activities.
Bodo Uebber is appointed Deputy Member of the Board of Management, effective December 16, 2003, with responsibility for DaimlerChrysler Services.
Dr. Manfred Bischoff, Dr. Klaus Mangold, and Gary C. Valade will leave the Board of Management at the end of 2003, but will continue to remain available to the company in advisory capacities.
Dr. Manfred Bischoff is appointed DaimlerChrysler Delegate for the Aerospace Industry, as of 2004, to focus more directly on the Groupís aerospace activities. In his new function, he will continue to report directly to the Chairman of the Board of Management of DaimlerChrysler AG. Dr. Bischoff will also continue as Chairman of EADS and Chairman of the Supervisory Board of MTU Aero Engines, thus ensuring the uninterrupted representation of DaimlerChryslerís interests within the European Aerospace industry.
Dr. R¸diger Grube, Member of the Board of Management responsible for Corporate Development, will assume additional responsibility for the Groupís alliance with Mitsubishi Motors Corporation, effective December 16, 2003.
Dr. Klaus Mangold is appointed Executive Advisor to the Chairman for Central and Eastern Europe and Central Asia, as of 2004. In his new function, he will report directly to the Chairman of the Board of Management. Dr. Mangold will primarily concentrate on initiatives to increase the Groupís business in Central and Eastern Europe, as well as in Central Asia.
Gary C. Valade, currently the Member of the Board of Management responsible for Global Procurement & Supply, will advise the Group on Procurement & Supply issues as of 2004, reporting directly to the Chairman of the Board of Management.
The following (or preceding) article is based on a posting by GhostRider71 which was based on an article in the Windsor Star.
Dieter Zetsche has started work on either blackmailing the Ontario government into donating cash to Chrysler for its new plant - which is replacing the existing large van plant - or moving it to Mexico or the Southern United States. Denying that he was using blackmail, Zetsche said that unless Canadian governments ponied up some cash - roughly $300 million of taxpayer funds - the plant probably would not be built in Windsor, as agreed in CAW negotiations. The plant would produce a new pickup, the Dodge M80, and possibly other vehicles based on it. Ontario spokesmen noted that the province does not donate money to companies (or give in to blackmail, the choice of words and nuance is yours), and does not want to start a trend of corporate welfare as other automakers, including Ford and Mitsubishi, start siting plants. Bill Cawthon noted that while labor rates in Canada are comparatively low (we'd add that Canadian workers are also well educated with a high literacy rate), American states are giving away vast sums of cash and services to lure industry, and Mexico has even lower labor costs (we'd add that it also has poor labor and environmental laws). /opinion/ Given DaimlerChrysler's past record for honesty, we suspect the Canadian plant was never taken too seriously by DCX leaders, and that a bidding war was always intended and has already begun. This is only our suspicion, and we would not be too surprised if Windsor actually received a factory - given that the CAW controls, to a degree, the fate of the Pacifica. It is also possible that Chrysler will take the Windsor plant seriously until the Pacifica is successfully launched, and then be "surprised" by an offer from Alabama or Georgia. /end opinion/
The UAW has won a victory over DaimlerChrysler, by convincing most of the employees at two North Carolina plants with 3,100 workers to join the union. The vote was certified by federal mediators, and the two plants are now UAW rather than nonunion - a major event for the UAW, given the erosion of its base as foreign companies open up nonunion plants throughout the South. If the UAW is successful in later organizing campaigns, the South may start to look less attractive, and new plants may open in traditional "brownfield" areas where they are desparately needed - such as Detroit - and where there are existing facilities, so taxpayers do not need to pay for rail sidings and the like.
This is not the first time the UAW has gone after DCX, having failed to win the Mercedes plant in Alabama in 1999, and having results at a Gastonia plant challenge by the National Labor Relations Board (a group not known for being kind to unions).
The UAW is trying to build on its success with similar organizing campaigns at four more Freightliner plants in the area, and has publicly stated that the future Dodge commercial van plant in Georgia must be organized. (Information from Detroit News)
As DCX's supervisory board is deciding whether to renew the contracts of more than half of its 13 members, 58 year old Juergen Schrempp has weighed in by saying he wants a younger board. This may be a way to try to oust the only two remaining Chrysler executives, Gary Valade (60) and Tom Sidlik (53).
At the time of the takeover, Daimler-Benz claimed that it was a merger and that Chrysler would have representation similar to Daimler-Benz on the board of the new DaimlerChrysler. Contracts for seven of the management board's members, including both of the former Chrysler people - both of whom are in charge of procurement and supply - expire on December 15. A decision on renewing them is due early this year.
Other board members include Chrysler CEO Dieter Zetsche, who is 49, and Chrysler COO Wolfgang Bernhard, who is 42. The ages of the five board members who are up for renewal, aside from Valade and Sidlike, are 49 (Zetsche), 52, 61, 60, and 59. /our opinion/ Schrempp's desire for a younger board should start with the DaimlerChrysler CEO. We feel he should set a good example by resigning, preferably tomorrow. (Information from Detroit News).
As reported in a Detroit News article, Daimler-Benz was secretly plotting a takeover of high-flying Chrysler Corporation as early as 1995, when the hot Neon had just been introduced, and the Ram was busy tripling its market share. This news, unearthed in a secret document which emerged as part of Kirk Kerkorian's anti-takeover lawsuit, may be the "smoking gun" of investor fraud that Kerkorian needs for his legal suit, which demands compensation and the undoing of the "merger" as penalties for cheating stockholders by pretending that a takeover was actually a merger. (If it had been seen as a takeover at the time, it probably would not have happened - or Daimler would have had to pay far more.)
Daimler-Benz was assisted in its underhanded efforts by Goldman Sachs, which prepared the Project Blitz report in late 1995. The document noted potential obstacles to the buyout, notably that any efforts to overtly buy the corporation would be fought.
The takeover occured in 1998, with the top two American leaders fired, many others resigning, promised corporate board seats going to others, the change from Chrysler Corporation to Chrysler Group, product development merged with Mitsubishi and Mercedes, and, along the way, Daimler-Benz CEO Juergen Schrempp saying, "If I had gone and said Chrysler would be a division, everybody on their side would have said, 'There's no way we'll do a deal. But it's precisely what I wanted to do."
/analysis/ Even if a judge acknowledges what is obvious to everyone else - that Chrysler was always meant to be a takeover target, and that the merger talk was deliberate fraud - the type of penalties are a big unknown. Microsoft has been convicted and found guilty of many crimes, but its lawyers and spokesmen who committed perjury have never been prosecuted for it, and Microsoft itself has yet to be punished in any meaningful way. (Indeed, the crimes it stands convicted of are still continuing, if news reports are any indication). We noted that an 18 year old convicted of stock fraud was forced to pay nearly $300,000 in penalties and restitution - but kept the other $500,000 he earned. In short, white collar crime in the United States does not appear to have penalties except for a very small number of people and companies. The most likely result of this lawsuit is either dismissal or a finding of cash for Kirk Kerkorian, rather than a breakup of DCX. By the time the trial is over - which could be many years - Chrysler's ability to survive on its own will have been severely injured, as nearly all of its products will be based in some way on Mercedes or Mitsubishi models, and royalties will have to be paid. However, freedom from Daimler's dominance and Mitsubishi/Mercedes designs, along with having Chrysler re-established as an American company, would be worth that price for many.
Banks Power's "Project Sidewinder," a Cummins diesel-powered Dodge Dakota, set a pickup truck speed record with an average of 213.6 mph - easily breaking the prior diesel record of under 160 mph, and also breaking the overall pickup record of 210 mph, set by Banks itself. The truck arrived at Bonneville not on a trailer, but towing its own spare parts trailer - it is street legal. Banks hopes to beat their own record next year. (Story provided by Ellis Brasher. Note that the Sidewinder, while street legal, is not stock.)
Alternet noted that Keith Bradsher's book High and Mighty uses Detroit market research - including that of Dodge - to show that SUV buyers tend to "insecure and vain. They are frequently nervous about their marriages and uncomfortable about parenthood. They often lack confidence in their driving skills. Above all, they are apt to be self-centered and self-absorbed, with little interest in their neighbors and communities. They are more restless, more sybaritic, and less social than most Americans are. They tend to like fine restaurants a lot more than off-road driving..." The article on alternet.org and the book itself go into much finer detail of why people buy SUVs instead of similarly sized, safer, more economical, and cheaper minivans, and notes that self-proclaimed excuses such as safety and space are not supported by the research. Our opinion is that this is an interesting read regardless of how you feel - and also that hacking Allpar's home page to eliminate the quote, which was done earlier today, is not an effective way to argue with its points.
Chrysler is reportedly set to declare a real profit, even after expenses for restructuring. That leaves Ford as the only member of the former Big Three to be losing money in 2002 - roughly $1 billion ($980 million). 2002 may be known as the year of GM's resurgence, though, with the auto giant posting market share and profit gains.
Meanwhile, speaking in Germany, Chrysler COO Wolfgang Bernhard said that the plant closings would end, and that new capacity was needed for new upcoming models. Will this mean re-opening closed plants? Probably not. A new plant is slated for Windsor, Ontario, partly to pacify the Canadian Auto Workers. Chrysler also has a recently-mothballed plant in Brazil which is close to state of the art, and re-opening it would save millions in fines to the Brazilian government, but it seems unlikely that this will happen. Also, before getting too excited, we should consider that most of the new models will probably be Mitsudodges - vehicles made exclusively by and for Chrysler seem to be increasingly on the decline, with large pickups likely being the last "pure" Chrysler models.
The United Auto Workers seem to have finally found a voice to protest with, as VP Nate Gooden, director of the department which deals with Chrysler, said that Dodge-badged Mercedes Sprinters would have to be assembled by UAW labor. That would eliminate much of DCX's desire to build the vans in Georgia rather than using the existing Windsor large-van plant. Reuters quoted Gooden as saying, "I told the corporation that if the Sprinter has got the Dodge label on it, that truck will be built by UAW members....It's got a Dodge tag on it, it's going to be a UAW plant no matter where it's built." Gooden said the same applied to the new joint venture engine plant. While no plans have been announced, it would be consistent for DCX replace the existing 2.0 / 2.4 liter plant with a new, non-union plant in the Southern United States.
The current UAW contract expires in September, and Gooden's words signal that organization of the Sprinter and other Mercedodge plants would be a key part of the negotiations. The Sprinter is currently sold as a Freightliner, but is being moved over to Dodge. Other Mercedes vehicles are expected to show up with the Dodge label, notably another commercial van which competes more directly with the Ford Econoline.
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