The DaimlerChrysler Corporation is a diverse international business that has many subsidiaries all around the world. Since the merger of Daimler-Benz and Chrysler Corporation in mid-November 1998 DaimlerChrysler has had many interesting things happening within their ranks. Between January 20, 1999 and March 5, 2001 DC has been sued by its number 1 shareholder, projected losses in the million to billion dollar areas, made joint ventures with its competitors, become the fourth largest provider of financial services, restructured some of its brands, closed American plants, sold off some of its divisions, and has expanded operations and modernizations in many of its Canadian and American factories.
Competitive ForcesNow that the DaimlerChrysler conglomerate has been undone and a private equity firm is set to take over operation of Chrysler, current and would-be owners of new Chrysler products are wondering what it will mean for them. In the short term, the answer is likely to be, "Business as usual."
Corporations as large as Chrysler do not change direction quickly and it will take time to see what sort of management changes Cerberus Capital Management LP, which paid $7.4 billion for an 80 percent stake in Chrysler, will make. Looking long term, though, there are some questions that may be on buyers' minds. For example, many of the latest Chrysler vehicles contain parts sourced from Mercedes-Benz. Will the DaimlerChrysler divorce mean those replacement parts could become scarce or more expensive? That's not likely to happen. Manufacturers and their suppliers continue to keep a stock of replacement parts generally for at least 10 years, and because most Chrysler vehicles are built in large numbers, secondary suppliers would likely find it profitable to fill any parts void.
Economic ForcesIt is surely good, after a lively economic boom, to have a shake-out so that the best...