Chrysler Corp., Daimler-Benz Officially Announce MergerBy Warren Brown
The Washington Post
Chrysler Corp. and Germany's Daimler-Benz AG formally announced a $36 billion merger Thursday, creating a new automotive giant stretching across two continents with a combined market value of $92-billion.
The agreement must be approved by the shareholders of both companies, and by the governments of their home countries.
Labor unions, too, will have a say in whether the merger goes through. But the initial prospects for approval seemed bright Thursday in the flush of publicity about what one of the new business partners called a "merger of equals."
The proposed combination of America's third-largest automaker and Germany's biggest industrial company would create a colossal enterprise with annual sales of $130 billion and a worldwide workforce of 421,000 people.
Though incorporated in Germany, the new company would have headquarters in both Stuttgart and Auburn Hills, Mich., a Detroit suburb that now serves as Chrysler's base of operations.
"Both companies have dedicated and skilled workforces and successful products, but in different markets in different parts of the world," said Juergen E. Schrempp, chairman of Daimler-Benz, best known for the Mercedes-Benz. "By combining and utilizing each other's strengths, we will have a pre-eminent strategic position in the global marketplace for the benefit of our customers."
Schrempp and Chrysler Chairman Robert J. Eaton said they anticipated no layoffs or plant closings to result from the merger. Indeed, Eaton said employment would likely grow at the combined company because Chrysler is already operating at 100 percent capacity in the U.S. and Daimler-Benz is expanding globally.
Schrempp and Eaton will share the top jobs at the new company for the next three years. Eaton said he planned on stepping down after that, leaving Schrempp in charge. As currently structured, the new company will be 57-percent owned by Daimler-Benz shareholders and 43-percent owned by Chrysler's.