LONDON - Chrysler's secret identity was Cleveland and Daimler-Benz was known as Denver during three months of secret talks that led to the astonishing merger between Chrysler and Daimler-Benz.
DaimlerChrysler aims to become the most profitable automotive company in the next millennium, not necessarily the largest. The new company expects added profitability of $1.4 billion next year, with most of that coming from new sales and an integrated purchasing system.
'We want to be No. 1 in shareholder value,' said Chrysler Chairman Robert Eaton, who will share power at the top with Daimler-Benz Chairman Juergen Schrempp. 'Size itself is not an objective. But we expect to grow substantially.'
Daimler-Benz shareholders will get 57 percent of the new company; Chrysler shareholders will get the rest. The nationality of ownership will be global: 44 percent US, 37 percent German, 7 percent other European, and 12 percent from elsewhere in the world, mostly Kuwait.
Headquarters will be both in Stuttgart, Germany, and Auburn Hills, Michigan.
The company will have common purchasing and r&d. Brands and marketing divisions will remain separate.
'We will share components and maybe a few platforms, but we will never compromise the brands,' Eaton said.
DaimlerChrysler plants may also produce products for both brands. 'They're not one company's plants or the other's,' said Bill O'Brien, Chrysler Corp.'s top lawyer and a member of the inner circle that negotiated the deal. 'They're all DaimlerChrysler plants.'
The chairmen said the company would grow.
'This is much more than a merger,' said Schrempp. 'We're creating the world's leading automotive company for the 21st century.'
Schrempp and Eaton will be co-chairmen for three years, each involved in all aspects of the company. Then Eaton will step down and Schrempp will be sole chairman.
The chairmen will be part of an 18-member management board with eight Chrysler and 10 Daimler executives. The two Daimler representatives from credit and aerospace divisions will not have votes.
A seven-member chairman's integration council will focus on the direction of the new company. That council will have four Germans and three Americans.
Chrysler President Tom Stallkamp will be the president of the new company with responsibility for integrating many of the processes. He is a clear No. 2 after the office of Schrempp-Eaton.
Gary Valade, Chrysler executive vice president and chief financial officer, is the global purchasing chief. Both Daimler and Chrysler purchasing executives will report to Valade.
'Purchasing is an area we need to focus on,' said Valade. He said DaimlerChrysler expects to save $400 million to $500 million on purchasing costs next year, out of a $60 billion annual purchasing bill. 'It will be one area that will be fully integrated.'
Talks began in January. Schrempp, who was in Detroit to speak at the Automotive News World Congress during the auto show, approached Eaton.
Many approvals are required. Chrysler executives said the merger could be completed no earlier than September or October.