STUTTGART - DaimlerChrysler AG Chairman Jurgen Schrempp plans to remake the company's management board to speed the integration of the former Daimler-Benz and Chrysler Corp.
By year's end, Schrempp will cut several positions from the board, and appoint an executive for each of five automotive product groups. Four of the groups combine both former Chrysler Corp. and Mercedes-Benz brands.
Since the merger last November, D/C has been run like a holding company, with the former Daimler-Benz AG and Chrysler Corp. operating basically separately. The new structure reflects Schrempp's desire to accelerate the merger, said a senior D/C executive who asked not to be named. 'Schrempp is driven by his feeling that the integration process needs another boost,' said the source. 'He realizes that he can only succeed in creating a `one-company' feeling by introducing truly transatlantic responsibilities.'
The reorganization will be implemented early this autumn and 'will be clearly established before the end of the year,' he said.
The five automotive operating jobs will be organized by vehicle category: passenger cars; minivans; sport-utility vehicles and pickups; light commercial vehicles; and heavy trucks and buses. Two other operating divisions are debis, the financial services unit, and Dasa, the aerospace division.
The management board will be cut from 17 positions to 13 and eventually to 12 after Co-chairman Robert Eaton retires by 2001.
The change represents a major reshuffling of top executive jobs in the company. At the time of the merger, the company put the most senior executives from each company on the management board.
'Some are very nervous,' said the executive. 'But everyone in the company, from the top down, knows that both the restructuring and the reduction in numbers have to happen.'
Former Chrysler managers will take at least two of the five automotive jobs and one or two of the four central-staff board positions, sources say. Currently, seven of the 17 board members are former Chrysler executives.
Among central staff functions, only research and development, finance, personnel, and purchasing will remain as management board positions.
Responsibility for corporate strategy and information technology will no longer be a board-level job. Former Daimler-Benz executive Eckhard Cordes currently heads those functions. He has asked to take an operating job, a source said. Cordes is a close ally of Schrempp and a key architect of the merger.
Under German corporate law, called Aktienrecht, management board members are legally answerable to shareholders for company decisions. In addition, management board members enjoy greater prestige and usually earn more money than non-members.
The board's current automotive operating executives include Jurgen Hubbert, head of Mercedes Benz and Smart passenger cars worldwide; Tom Stallkamp, head of Chrysler, Plymouth, Jeep and Dodge passenger cars and trucks; James Holden, head of global brand development of all former Chrysler brands and head of sales and marketing operations for all D/C brands in North America; Dieter Zetsche, brand czar of Mercedes-Benz and Smart and simultaneously responsible for sales and marketing of all D/C brands in Europe, Africa, Asia and Australia/Pacific; and Tom Gale, head of product strategy and design for Chrysler passenger cars.
Those positions will be replaced by the five product group jobs.
Also disappearing from the board is a position that combines responsibility for Latin American sales and marketing and Chrysler truck operations, currently held by Theodor Cunningham. Under the new structure, each vehicle group board member will have full responsibility for product development, production, and sales and marketing.
Sources said Schrempp and Eaton have not decided who will occupy the new board positions.
'There are various factors to be taken in account,' said one insider. 'One is age, but there is also the necessity to be considerate in some decisions. Schrempp will pay a lot of attention to the feelings of his American partners and the self-respect of the American employees.
'For example,' he said, 'you cannot dispute their competence in the minivan and SUV segments, which were created by them. But there is no experience with light commercial vehicles and truck and bus operations on the former Chrysler side. It is also obvious that the passenger car division would be headed by a former Daimler-Benz manager.'