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Germany too small for SchremppDAIMLER-BENZ chairman Jürgen Schrempp's rectangular glasses give him a distinctly German appearance but they belie an Anglo-Saxon business approach that has earned him respect as well as accusations of ruthlessness. Since taking over Germany's biggest industrial company in 1995, Schrempp has pushed through drastic and often unpopular measures, shutting the AEG electrical unit, letting Dutch plane maker Fokker go bankrupt and pushing Mercedes into the small-car market. His predecessor Edzard Reuter recently accused Schrempp of "ruthless brutality" and questioned his willingness to rack up restructuring and write-off costs which led to a record DM7.2-billion loss in 1995. But Schrempp's drive to shed loss-making operations, eliminate a layer of top managers and instil a more go-getting spirit is widely seen as a blueprint for what is still a relatively new concept in Germany - shareholder value. His swift, decisive steps in transforming Daimler from an integrated high-tech company back into a transportation group showed he had the ambition to go for a really big deal. But before this week, few would have expected he was about to effect the world's biggest ever industrial merger, with third-ranked US car maker Chrysler. Never prone to understatement, Schrempp hailed the link-up on Thursday as a "marriage made in heaven", well aware that in three years' time he looks set to become sole chief executive of DaimlerChrysler, the world's fifth-largest car producer. Chrysler chairman Robert Eaton, who will be co-chief executive with Schrempp to aid integration in the first years of the merger, said he would then step down as both agreed it was better to have one head in the long run. The two are on first name terms - common in Anglo-Saxon business but by no means a given in Germany - and were all smiles as they answered reporters' questions. Schrempp insisted on answering even German reporters in his excellent English, acquired during his 10-years at Mercedes in South Africa. Between 1984 and 1986 he was chairman of Mercedes Benz SA. The merger that emerged on Thursday had been discussed and shelved in 1995. Schrempp revived the idea during a casual meeting with Eaton during the Detroit motor show in January. "You know, it was quite interesting because I visited Bob and presented the idea and was not quite sure how he would receive it," Schrempp said. "And he smiled and said 'we have done the same study, just give me a week or two and I'll come back to you', so when I came they had done their homework already." Analysts acknowledge Schrempp has been effective. Daimler last year lifted its return on capital employed to 10.2% from 5.8%, close to its group-wide goal of 12%. His forthright style was also credited with limiting the fallout from a "moose avoidance" test last year in which the new Mercedes A-Class car - the product of Daimler's foray into the small car market - flipped over during extreme manoeuvring. He withdrew the car from the market, had it refitted with an electronic stability system and relaunched it. Sales are now back on track. - Reuter.
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