Case Name :      DaimlerChrysler: Post-Merger News

Authors :           Pratima Bansal, Doug Airey, Andy Gepp, Cathy Harris, Yves Menard

Source :             Ivey Publishing

Case ID :            903M49

Discipline :        General Management

Case Length :    20 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Daimler-Benz AG, a large automobile manufacturer in Europe, and the Chrysler Corporation, one of the Big Three auto makers in North America, merged to create DaimlerChrysler. On the surface, everything seemed to be going as planned. In reality, all was not well. Organizational changes, conflicting information, and doubts about the future structure of the company resulted in the departure of numerous Chrysler employees, including many mid-level managers and engineers. While initially amalgamated into Daimler, the Chrysler Group ended up as one of three separate automotive divisions. In 2001, DaimlerChrysler recorded a $1.2 billion loss in operating profit (before one-time effects). Estimates for 2002 called for a break-even result, but the company was facing a $9 billion lawsuit filed by the 5th largest shareholder, who claimed that Daimler had deceived investors by touting the venture as a merger of equals.