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So Long Daimler and Thanks for All the Gas

Nine years ago popular wisdom held that the well-heeled maker of Mercedes-Benz would rescue down-on-its luck Chrysler. Today we pick over the remains of the transnational automotive colossus wondering whether this was a doomed marriage of economic haves and have nots – or the byproduct of multi-cultural management challenges?

Nine years ago popular wisdom held that the well-heeled maker of Mercedes-Benz would rescue down-on-its luck Chrysler. Today we pick over the remains of the transnational automotive colossus wondering whether this was a doomed marriage of economic haves and have nots – or the byproduct of multi-cultural management challenges?

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While company officials hastened to downplay fears of further cuts into Chrysler’s 80,000 mostly unionized workforce, additional layoffs seem inevitable beyond the 13,000 announced in February.

Should we add globalization to the burgeoning list of possible career hazards? Consider this: DaimlerChrysler management and investors may have overreached but as multinational stories go, it is the exception rather than the rule.

In a way, this failed marriage obscures the fact that many other American giants such as Pepsi, GE, General Motors, Citi and IBM have done an effective job of globalizing their corporate operations and recruiting talent around the globe.

Still, this was no merger of equals, contrary to the popular spin of the time. To what extent is the breakup and sale a byproduct of multi-cultural management challenges? I suspect that we will read a lot of stories about how German management never really ‘got’ Chrysler or connected to its American customers.

Another case in point is SAP AG, the German enterprise software giant, which according to a report in last Friday’s Wall Street Journal ran into trouble attempting to tone down its Germanic culture while globalizing its identity. It’s not a stretch to compare Daimler and SAP, both large German employers with global operations, both recently seen stumbling in America.

More often than not companies globalize operations without having a plan to unify the corporate culture. “As the world has flattened out people are noticing huge differences in the same institution,” explains Robert Gunn, co-founder of Accompli, a change leadership advisory firm. After a few years of global activity, the multinational company management realizes, “We’re one company but not operating with the same philosophy,” he adds.

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Ultimately, however, DaimlerChrysler’s downfall might have just been a bad business deal, rife with miscalculations and bad luck such as higher gas prices coupled by a lack of cultural understanding among senior management. “We obviously overestimated the potential of synergies,” Daimler Chief Dieter Zetsche said of the merger at a press conference. “I don’t know if any amount of due diligence could have given us a better estimate in that regard.”

In retrospect, were there red flags – such as a whopping $1.6 billion loss and heavy layoffs – that employees should have seen coming? Will workers be better off without Daimler? Cerberus Capital Management may have deep pockets, but I doubt that Chrysler will find it any easier to compete on the global stage without Daimler in tow.

Cerberus Chairman John Snow said the right things about making a long-term investment in Chrysler and its workers. Next, it’s up to Chrysler Holding LLC employees to buy into Cerberus’ plans or head for the nearest highway.

Rusty Weston, My Global Career • San Francisco, Ca • rusty@myglobalcareer.com • http://www.myglobalcareer.com/

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