Andreas Renschler was praised for blending US and German business cultures and Japanese and German manufacturing methods at DaimlerChrysler's M-class plant in the USA. Now he faces a few set of challenges at troubled MCC-Smart.
RENNINGEN, Germany - When Andreas Renschler starts his new job at MCC Smart on Wednesday, October 13, he'll find a troubled company that has done better lately but still faces major doubts about its future.
Renschler, one of DaimlerChrysler's rising stars, has been put in charge of the subsidiary that builds and sells the tiny Smart two-seater. The lanky 41-year-old led Mercedes-Benz's M-class venture in America and is a confidante of Chairman Jurgen Schrempp. He will give Smart more clout inside D/C. Unlike his predecessor, Lars Brorsen, who resigned last month, Renschler will have a seat on Mercedes' management board.
'We will be much better represented in the corporation,' said an MCC executive. 'He is also very good at coaching people. That is the crucial thing he brings.'
The easy-going dairy farmer's son has always been well-connected inside D/C. At 33, he was asked by former Mercedes-Benz Chairman Werner Niefer to lead a study team to decide whether Mercedes should build a sport-utility. He reported directly to Niefer, and later Chairman Helmut Werner, who put him in charge of developing the new model and setting up the M-class plant in Vance, Alabama.
Renschler was praised for blending US and German management cultures in Alabama. After the D/C merger, Schrempp handed Renschler the task of integrating the international management of the combined companies.
But Smart may be his biggest challenge. The car debuted one year ago - six months late because of stability problems. Disappointing sales followed heavy criticism by motoring journalists and driver complaints of tricky behavior on icy roads last winter.
Volume has increased after a $70 million 'relaunch' in April that included lower prices, new advertising, a dealer assistance program and retrofitting electronic stability control to aid traction.
MCC Smart took 9,400 customer orders in September and expects to surpass 80,000 for the year - after receiving just 6,500 orders in the entire first quarter. But that is still far short of the original target of 130,000 units in 1999.
'Things have picked up because Mr. Schrempp made a clear commitment to the future of Smart at the Frankfurt auto show,' said MCC spokesman Florian Moser.
But MCC is expected to drain as much as $400 million from D/C profits this year. Analysts are not sure that Smart can be fixed.
'We are skeptical about the ability to make a material reduction in Smart losses in 2000,' said a report issued by Merrill Lynch in London. 'D/C will be able to make its (80,000) target but when one considers the extra costs from relaunching the range, we would estimate that break-even level has risen to nearer 140,000 units from the initially stated 110,000-120,000.'
See comment, Page 6