Chrysler - Case Study

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CHRYSLER CORPORATION: NEGOTIATIONS BETWEEN DAIMLER AND CHRYSLER ∗ In January 1998, Jürgen Schrempp, CEO of Daimler-Benz A.G., approached Chrysler Corporation Chairman and CEO, Robert Eaton, about a possible merger, acquisition, or deep strategic alliance between their two firms. Schrempp argued that: The two companies are a perfect fit of two leaders in their respective markets. Both companies have dedicated and skilled work forces and successful products, but in different markets and different parts of the world. 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. We will be able to exploit new markets, and we will improve return…show more content…
auto market by the mid-1990s. As Fortune magazine stated in late 1996, "If a vehicle is in demand and generates high profit margins, you can bet Chrysler 's making it.,,4 While Chrysler 's success and relatively conservative management style attracted praise from industry observers, it also attracted the attention of Las Vegas billionaire Kirk Kerkorian, who with the help of retired Lee Iacocca, mounted a hostile bid for Chrysler in 1995. The $55 per share ($27.50 today following a 2-for-1 stock split in 1996) not only failed to win approval of Chrysler 's board, but turned out to be largely unfinanced, leaving Chrysler to continue under current management. Chrysler- Products Chrysler focused heavily on trucks in its product offering. In 1997 trucks (including minivans) accounted for about two thirds of Chrysler 's vehicle sales in the United States and cars for about one third. Chrysler 's trucks include sport utility vehicles, such as the Jeep Wrangler, Jeep Cherokee and the Dodge Durango, pick-up trucks, such as the Dodge Ram, and minivans such as the Plymouth Voyager. One of Chrysler 's most successful products was the minivan, which Chrysler invented in 1983. Dodge Caravan/Plymouth Voyager, the world 's most successful minivan, was first introduced in 1984. Chrysler dominated the segment ever since. In 1997, minivans accounted for about one third of
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