NEW YORK/FRANKFURT - Outside the New York Stock Exchange last week and at its German counterpart, in Frankfurt, DaimlerChrysler lined up a range of its products as part of the new company's Day One ceremonies.
In Frankfurt, tiny Smart cars stood near a giant Freightliner truck. A silver Dodge Viper and a Chrysler 300M were parked nearby. Thrown into the mix were a Eurocopter helicopter and a giant MTU diesel engine. Also on display were Mercedes-Benz sedans.
Is the three-pointed star getting lost in the DaimlerChrysler shuffle?
In New York, Juergen Schrempp, co-chairman of the new company, was asked how the loyal Mercedes-Benz buyer in Germany might feel knowing the world's most sacred automotive name was now 'just a brand,' one among many under a large corporate umbrella.
Schrempp and his American counterpart, Robert Eaton, said it again and again at Day One festivities: We will do nothing to tarnish the brand names we have brought together.
'The two of us are the custodians of the brands,' said Schrempp
There was urgency in their tone, because both men are well aware of the value of the brands they own. Two of those, Mercedes-Benz and Jeep, are universally known. One in particular, Mercedes-Benz, is a brand under siege.
Revered for quality and engineering, Mercedes-Benz has recently stumbled several times in those areas. The M-class sport utility has experienced nagging quality problems. The A-class small car flipped during the famous moose test, and Daimler-Benz had to spend more than $150 million fixing the problem. Some critics believe neither vehicle is worthy of the hallowed three-pointed star.
Mercedes-Benz, synonymous with quality, is now a stablemate of Dodge, Chrysler, Plymouth and Jeep, brands which have chronically lagged behind General Motors and Ford in the North American quality race.
John Lawson, an automotive analyst with Salomon Smith-Barney in London, said the marriage with Chrysler may actually resolve some brand dilemmas: 'In many ways merger gets them out from under some of the issues they were facing with regard to stretching the Mercedes brand.'
The A-class is a good example. 'It means they can maintain an upmarket small volume small car,' he said. 'They're not obliged to push that into much higher volumes.'
The brand preservation issue will dictate the new company's priority lists over the early days of integration. Executives face a delicate balancing act.
'We have to manage the tradeoff between preserving the brands and achieving the synergies,' said Eckhard Cordes, director of corporate development and information technology management and a key advisor to Schrempp.
The company has promised the synergies will save $1.4 billion during the first year. During the early days of the merger, DaimlerChrysler is tackling only things customers do not see, such as purchasing.
The two companies had already combined purchasing activities under global purchasing and supply chief Gary Valade the day they became one.
'I do not exclude that further down the road, we might integrate other functions,' said Cordes, 'once we determine there is no risk.'