I attended a tippy-top exec conference in Orlando about a decade ago. GE's Jack Welch was an "obvious" keynoter. And he was paired with his European equal and superduperwonderexecextraordinaire counterpart, Daimler's Jürgen Schrempp.
Schrempp, 20 years after conglomeration had been dismissed in the U.S., had discovered a formula for making it work, and he was prepared to share. The presentation was late in the afternoon, and we can hope that none of the participants was peppy enough to take notes.
I was odd man out in my subsequent presentation, as I alluded, though acknowledging I was a mere observer, to my skepticism. (Something elliptical from me, no doubt, such as "How frigging stupid can someone be?" I was not quite hissed, but the body language from our best and brightest amounted to body language hissing. How dare I question the Mighty Duo?)
My point here is not to applaud my prescience; instead it is to wonder, once again, at just how stupid our "best and brightest" can be? Answer, TP flavor: stupid beyond belief.
Over and over ... and over.
Then over again.
By 2007, when the Chrysler "merger" (predictably) turned sour, this was the assessment of Mr Schrempp:
"His bets went sour one by one."—WSJ, 05.15.2007
A couple of years earlier, one Daimler"Chrysler" observer had said:
"Schrempp is one of the last dinosaurs of Germany Inc. He represents a strategy of acquiring assets and building empires that just didn't work."—Arndt Ellinghorst/ analyst/Dresdner Kleinwort Wasserstein
But, of course, the current assessment of Daimler is triggered by the Chrysler fiasco. Here are a few of the more choice comments:
"Marriage in heaven"—Daimler-Benz and Chrysler exchange vows, circa 1998 (Jurgen Schrempp is quoted here)
"the divorce on earth" —Daimler exec, circa May 2007, on probable Cerberus private equity purchase of Chrysler from Daimler
"Obviously, we overestimated the potential for synergies."—Dieter Zetsche, CEO, Daimler
And the prospects for poor Cerberus:
"This is a bar at 2 a.m. on St Patrick's Day. Everyone's wondering how much longer they can stay before the bar eventually closes."—Peter Morici, U of Maryland, on Cerberus-Chrysler and prospects for the U.S. auto industry
(Will somebody please explain to me how a "train guy," John Snow, previous CEO of CSX, will turn Chrysler to gold? Snow, not one of our "Top 40" Treasury Secretaries, is Chairman of Cerberus.)
Here's my not particularly brilliant Report Card on DaimlerChrysler 1998 to 2007:
Manifold Synergies/No (Predictable. Never happens.)
Severe Scale limits/Yes (Predictable. Always happens. Witness even Wal*Mart these days.)
Culture clashes/Yes (Predictable; a pretty good culture meld was the chief reason, as I see it, that the HP & Compaq thing worked, as suggested above)
Rushmorean ego issues/Yes (Predictable. Always!)
Customer acceptance /No (Predictable, as customer service always tanks when cost cutting becomes God.)
So why oh why oh why oh why do these "leading lights of management" do this shit over and over and over and over?
(More, used by me in a recent Post: "Despite a decade of banking mergers, there is no evidence that big banks are any more efficient or profitable than their smaller rivals."—Financial Times, 0329.07, on possible Barclays-ABN Amro merger "When it comes to asking the stock market whether bigger banks are better, the current answer is a resounding 'no.'"—Citigroup analysis, 2006, Uh-huh.)
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