A Merger Turns Sour


by Evander Klum - Date: 2007-05-16 - Word Count: 614 Share This!

In the beginning of the merger between Daimler-Benz and Chrysler so many promises were made, unfortunately none of those promises were ever realized. The very objective of the merger was to combine German technology and prestige with Chrysler's engineering expertise to gain access and to better understand the American market.

The merger of Daimler-Benz and Chrysler AG was dubbed as the merger of equals and aimed to make DaimlerChrysler the world's best automaker and to produce a line of irresistible vehicles. That was the original plan but so many unfortunate things happen just after the union and Chrysler AG didn't turned out to be that profitable other half that Daimler-Benz is dreaming of. And so last February 14, 2007 Daimler-Benz has decided to end the marriage so as not to lose more money.

There were four interested buyers of Chrysler and one of which is Cerberus Capital Management LP which according to reports is going to buy 80.1 percent of Chrysler for $7.4 billion.

The decision to sell Chrysler was a sign that the promised magic combination didn't turned out as expected. Looking back, the first vehicle produced resulting from the merger came in 2003. The 2004 Chrysler Crossfire was a two-seater. The exterior was the work of American designers but underneath it relied heavily on the mechanical underpinnings of an older version of the Mercedes-Benz SLK sports car. It made a splash after it was introduced in the market unfortunately its ripples died quickly.

The Chrysler 300 and 300C sedans are probably the most impressive Euro-American creation resulting from the merger. These models have rear-wheel-drive which is a sign of a good sporty handling. The Chrysler officials also said that they were looking at rear-wheel drive long before the merger. They said that it was Mercedes-Benz that has endorsed the idea that's why the rear suspension was based on the Mercedes E-Class sedan.

The styling that the 300 possess was purely American. The most powerful version of the 300C is equipped with an all-American 5.7-liter Hemi V8 engine that produced 340 horsepower. The 300 was also considered as an international stunner and was awarded 2005 Motor Trend Car of the Year similarly 50 automotive journalists from the United Sates and Canada voted the 300 as the 2005 North American Car of the Year.

The sales were strong that by the end of 2005, the Chrysler 300 was at the top of the J.D. Power and Associates "luxury entry" segment. Chrysler 300 was able to sell almost 144,000 units and surpassed competition like BMW, Acura, Infiniti, Lexus, Cadillac, and Mercedes. This has raised hope that the cross-Atlantic alliance would finally bring great news for the company and the consumers. But sadly, after the 300, the merger was only able to produce vehicles that lacked the magnetic flair and ended flopping in the market.

Last year DaimlerChrysler the manufacturer of top-of-the-line Benz car cover has introduced the Dodge Caliber which is a small car that was supposed to challenge its heavyweight competitors such as the Toyota Corolla and Honda Civic, sadly the Dodge Caliber ended just that---small and trying. But this did not dishearten the automaker and courageously announced that it will sell the caliber worldwide and use it to establish the Dodge nameplate. Unfortunately, due to the car's uninteresting features, unrefined driving qualities, and cheap interior it didn't do well in the international market.

Failure after failure came for Chrysler that finally the investors of DaimlerChrysler were clamoring for the sale of the money-losing arm of Daimler. And according to the Consumer Reports magazine the most disappointing vehicles for the year includes the 2007 Dodge Nitro, 2007 jeep Compass, Chrysler Sebring, and the Dodge Caliber.


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Evander Klum is a Business Administration graduate who hails from Alabama. He enjoys extreme sports and he is also a car racing fanatic. At present, he works as a marketing manager at an advertising agency in Cleveland.

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