The Chrysler-Mercedes Benz Merger

Paper Summary:

This paper studies the ways in which the Daimler Chrysler merger makes both economic and business sense inasmuch as both companies have a history of being internally flexible and willing to try any sort of technique to make a product or an idea work. The writer gives examples of the positive results of the merger and also raises some of the potential pitfalls, such as clashing company cultures.

From the Paper:

"However, as Sorge and Phelan observe, the two companies, although in the same industry have fundamental differences apart from the obvious differences in business culture. "Chrysler has creative styling and low development costs. Daimler is an engineering company with high development costs" (Sorge & Phelan, 1998, 46). Even with this disparate core, the merger is an operating merger rather than a financial one. The difference is essentially one of content. Both companies were profitable and could have survived without the deal. However, since this is an operating merger, the combined companies will attempt to operate co-mutually, an attempt that can be hindered by the fact that the corporation will have two headquarters and two CEOs for the first 18 months of operation. The combined company comprises about 180 manufacturing facilities. Fifty of those are located in Germany, 40 are in America and the rest are in Argentina, Brazil, Canada, Indonesia, Mexico, South Africa, Spain, and Turkey."

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