Without Chrysler MB may not be big enough to compete globally

[far2000]

Screw Getting bigger, MB need 2 concentrate on getting better......We need That Tank like BUILD That we know MB For.!!!!!

 

[450SEL6.9]

Yet another automotive industry analyst at a stock brokerage talks out of his arse. I am continually astounded - gobsmacked, even - that some of these guys have a job analyzing companies and the stock market.

What does competing globally mean? It is a subjective statement from one analyst. Does he really think DaimlerChrylser is competitve now? After all, Chrysler is bleeding red ink! The purpose of business is to make a profit. Words like competitive, innovation, and the dreaded 'brand value' mean squat when your don't make a bloody profit.

At the end of the day, I think the auto industry is run by too many dumb, overpaid executives. More celebrity than ability, really. Did anyone read how much the new Ford CEO has been paid for a few months work? Hmm, I thought Ford was bleeding red also. . .

 

[bmer]

Did anyone read how much the new Ford CEO has been paid for a few months work? Hmm, I thought Ford was bleeding red also. . .

Well, Mulally is getting what Ford promised him when he agreed to leave Boeing and start the Mission Impossible at the Blue Oval. So that's an exceptional example.

 

[Giannis]

Just my 2 cents, but i think that when MB gets indipendent, within 5 years time, it will be very healthy when it comes to economics and will be able to be what BMW is now. An indipendent luxury car maker, successfull all around the earth with many subsidiaries and many earnings!

 

[450SEL6.9]

Well, Mulally is getting what Ford promised him when he agreed to leave Boeing and start the Mission Impossible at the Blue Oval. So that's an exceptional example.

But is it really an exceptional example? I think it won't be because I think the egos of the 21st century celebrity CEO are massive! When the others see what Ford's CEO is paid, they will want parity. And you know what? I'll bet the other car companies are dumb enough to give them parity! These are the same companies that happily pay golfers anywhere from $8-10 million per year to wear their corporate logos in hopes that it builds 'brand value'.

I will recheck my facts, but I believe the money that Ford has promised their new boss rivals what Carlos Ghosn has made in total at Nissan. The difference with Nissan is that it makes a profit. It makes a profit because it makes great cars their customers want to buy.

 

[bmer]

But is it really an exceptional example? I think it won't be because I think the egos of the 21st century celebrity CEO are massive! When the others see what Ford's CEO is paid, they will want parity. And you know what? I'll bet the other car companies are dumb enough to give them parity! These are the same companies that happily pay golfers anywhere from $8-10 million per year to wear their corporate logos in hopes that it builds 'brand value'.

I will recheck my facts, but I believe the money that Ford has promised their new boss rivals what Carlos Ghosn has made in total at Nissan. The difference with Nissan is that it makes a profit. It makes a profit because it makes great cars their customers want to buy.

Sorry. I should've been more specific. I'm not saying you're wrong. Some management salaries are indeed outrageous. But still I think this particular case is different. You see we have never had this kind of situation before. We have the Big Three (or Two and a Half if you wish) in serious problems that will take time to be solved. These are the same car companies that used to be the biggest in the world by a large margin. And now suddenly they are unable to respond to the changed demands of their business environment. As Ford (and the other two) will need to completely change their product strategy, it is IMO reasonable that the person who accepts such a challenge is entitled to a large compensation.

 

[450SEL6.9]

Sorry. I should've been more specific. I'm not saying you're wrong. Some management salaries are indeed outrageous. But still I think this particular case is different. You see we have never had this kind of situation before. We have the Big Three (or Two and a Half if you wish) in serious problems that will take time to be solved. These are the same car companies that used to be the biggest in the world by a large margin. And now suddenly they are unable to respond to the changed demands of their business environment. As Ford (and the other two) will need to completely change their product strategy, it is IMO reasonable that the person who accepts such a challenge is entitled to a large compensation.

bmer, I have no problem with large compensation, as long as it comes if results! For instance, the oil company bosses and investment bankers should get paid like kings because their stockholders have enjoyed awesome returns on their investment. Ford is possibly a bankruptcy candidate shelling out before any consistent results have been achieved. So what have their stockholders paid for? A brand name CEO? I think the fact that he accepted a challenge does not qualify the CEO of any company to a massive and early payout.

Also, there is a precedent with Nissan. They were in bad shape when Reanult sent Ghosn in. He had numerous challenges to face, including corporate Japan's lifetime employment policies, currency issues, deflation in the Japanese economy, etc . . . Ghosn has always been quick not to take too much credit for the turnover. He has said that Nissan got turned around because engineers built good cars. Also, I think Ghosn made a paltry $2 million U.S. even after Nissan was profitable. Sure, Japan is a different market, but it's about time American companies realize runaway un-merited compensation is not helping their bottom line.

 

[bmer]

I think it's too early to judge whether Mulally has succeeded or not. The common problem in a situation where the company has gotten into troubles is that the new CEO doesn't have enough time to make a change. Everybody is waiting that he makes results immediately but usually the change has to be a large one and therefor it takes a lot of time. The shareholders get impatient and they fire him. The same thing can happen a couple times until they're tired of finding a new manager.

What Ghosn did with (Renault-)Nissan is legendary but I don't think it's comparable to this. Besides if Ghosn would have been made Ford CEO I think he's salary had increased as well. Ford is definately an icon in the automotive world and its significance for the American industry is unparalleled. Mulally already did remarkable work at Boeing, so it wasn't going to be cheap to get him to work on a gigantic and challenging project as this.

 

[Bighead]

From a different angle, whoever is picking up/buying Chrysler from MB is going to benefit from a whole range of good/solid technology and hardwares. Notably the following:

* Rear wheel drive platforms, as in place with the 300C;
* independent multi-link suspension of the W210 chassis;
* Traction control, such as ESP;
* Switch gears, i.e. windows switch or turn-signal stalk (if you've ever driven a Chrysler prior to the "merger", you would know what I mean); and
* Transmission: I think MB has basically donated their 5-speed auto to a number of the Chrysler products.

 

[Mr. Mercedes]

I wonder how the R&D department is going to be split up. Also what will happen to the complete new range of engines currently under development?

 

[Brendan Moore]

I wonder how the R&D department is going to be split up. Also what will happen to the complete new range of engines currently under development?

Regardless of the future physical separation of Chrysler and Mercedes, the chatter on Wall Street is that every potential deal being looked at in terms of a sale has considerable cooperation between Chrysler and Mercedes envisioned after the sale.

Maybe Mercedes is hoping to retain some potential of reduction in costs and some synergies through the mechanism of cooperative agreements with their soon-to-be former partner/vassal.