STUTTGART - The deepening crisis at Chrysler has put DaimlerChrysler Chairman Jurgen Schrempp's own job at risk.
The sudden dismissal of Chrysler Group CEO James Holden last week may have bought Schrempp some time. But even D/C insiders say that things need to improve fast if the chairman is to survive.
After Holden's firing, rumors spread in Germany last week that Schrempp might also be forced out.
'Everyone is calling me with this rumor,' said Peter Schmidt of industry research group AID Ltd. 'I don't think he is going to go in the next few months, nor do I think he deserves to. But the fuse is lit.'
Chrysler Group lost E580 million in the third quarter. Things are so bad that D/C late last week was expected to issue another profit warning for the fourth quarter.
Schrempp also faces questions about the strategic wisdom of the company's 34 percent stake in troubled Mitsubishi Motors Corp.
Holden's ouster and replacement by D/C commercial vehicles boss Dieter Zetsche was part of a strategy to restore profitability at Chrysler. But a D/C manager said it was also meant to 'send a signal to analysts that now finally Schrempp is hands-on.
'Whether this message is appreciated in the stock price remains to be seen,' he added.
DaimlerChrysler shares have plummeted in value since the merger almost two years ago. The sharp decline has frustrated Schrempp, who often describes himself as a champion of shareholder value.
'Schrempp's future may not be so much in the hands of the supervisory board as the traditional Daimler-Benz small shareholder,' said Schmidt.
'Instead of investing their life savings in pension funds, they put it all in Daimler-Benz shares. That is the cruncher. These people are very unhappy. There could be so much flak that the supervisory board has to do something.'
In a recent interview, Schrempp denied feeling pressure from the company's big shareholders, including Deutsche Bank, the Kuwaiti government and American businessman Kirk Kerkorian.
'They are very convinced that what we're doing is perfect, excellent and we have no doubt that our stock will appreciate,' he said in an October 25 interview.
Company insiders say Schrempp feels the strain. Some critics even suspect that his instinct for self-preservation led to the decision to send Zetsche to Chrysler.
'Dieter Zetsche is the only serious competitor for eventually becoming Schrempp's successor,' said a senior DaimlerChrysler executive in Stuttgart. 'He could have become an easy option for the supervisory board if the main shareholders became fed up with Schrempp's performance.'
Dispatching the heir apparent to America to sort out Chrysler's tough problems also 'gets him out of the direct view of the supervisory board,' said the executive.
Simultaneously, Schrempp moved an ally, Eckhard Cordes, into the top job at DaimlerChrysler's commercial vehicles division, succeeding Zetsche.
Cordes, management board member for corporate strategy and IT management, is often depicted as the mastermind behind the merger. Sources say he has frequently asked to be put in charge of an operating division.
'This job is a chance for Cordes and is designed to position him as an alternative to Zetsche for eventually succeeding Schrempp,' said a source to the chairman. 'But a lot will depend on whether Zetsche can sort out the Chrysler mess, and whether Cordes' merger and acquisition strategy pays off in the long run.'
Another DaimlerChrysler source rejects speculation about Schrempp's motives. The source said: 'This is definitely not the time for strategic play. This is a major crisis, it is bloody serious. There is no room for tactical manuevers.'