 Mercedes CLS 55 AMG: giving people what they want |
Daimler-Benz and Chrysler look set to divorce, following the German company's hiring of finance company JP Morgan to explore potential futures for Chrysler.
Options include the straight sale of Chrysler, spinning off Chrysler to shareholders or continuing with the situation as is. The third option is, according to a sources close to the company, the least preferred.
The two companies merged in 1998 with the hope that some of the German company's success would rub off on the ailing Detroit firm, and the combination could become a global automotive powerhouse.
That hasn't happened. Chrysler was heavily exposed to the SUV and truck market just as US consumers started moving to smaller vehicles. It misjudged demand, leading to an inventory stockpile, and it lost €1.1 billion (about £720 million) in 2006. Mercedes by comparison made €2.4 billion (£1.6 billion) last year but the group's results were dragged down by Chrysler' losses.
Following the announcement of the review of the relationship between the two organisations, there was a lot of trans-Atlantic solidarity expressed, with execs saying that there wouldn't be finger-pointing, nor would the review process affect the relationship.
But the fact remains that while Mercedes has managed to remain focused on giving people what they want, Chrysler has been caught on the hop by assuming that the US consumer's love affair with big gas guzzlers could never end.
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