Jurgen Schrempp has survived as head of DaimlerChrysler after two weeks of high drama – but for how long is still an open question.
Automotive News Europe said DC’s supervisory board backed Schrempp, 59, and his strategy of turning the company into a global car giant. But Schrempp critic Jurgen Hubbert’s role was strengthened when he won a mandate to carry on as head of the Mercedes car division.
The board ousted Wolfgang Bernhard, previously No. 2 at the Chrysler division, two days before he was due to take over as head of Mercedes Cars on May 1. Instead, Hubbert, head of the Mercedes passenger car group since the late 1980s, will stay in the post indefinitely. Hubbert is known as an independent figure and one of the few people who can stand up to Schrempp.
DC sources said Hubbert, due to retire in August as Mercedes chief, led the move at the New York supervisory board meeting last Thursday to oust his planned successor Bernhard.
The German press reported that Schrempp felt betrayed after Bernhard, a long time Schrempp protege, vigorously opposed Schrempp’s bid to rescue Japan’s debt-ridden Mitsubishi Motors. DC has a 37.3% stake in Mitsubishi.
A week earlier DC’s supervisory board had refused to fund Mitsubishi’s turnaround plan with a €4.5 billion cash injection.
Bernhard was among eight of the 11-member board who rebelled against Schrempp. Others included chief financial officer Manfred Gentz, Hubbert and Dieter Zetsche, Chrysler CEO.
DC sources said last week that Bernhard’s aggressive style and know-it-all approach cost him the top job at Mercedes-Benz.
Bernhard has only been in Germany for two months to work hand-in-hand with Hubbert. He and Hubbert were to jointly run Mercedes beginning May 1. Then Bernhard, 43, was to have taken full control on August 1.
Hubbert, 64, was to have stayed on as head of DaimlerChrysler’s executive automotive committee until his retirement at year’s end.
But in Bernhard’s two months in Germany, considerable resistance to him built up among suppliers, union workers and Mercedes management, a source said.
“There was such resistance to Bernhard that Hubbert decided to propose that he [Bernhard] not take over Mercedes-Benz,” the source said.
Bernhard reportedly approached the Mercedes-Benz post the same way he did at Chrysler. But trying to launch a restructuring plan for the company’s traditional prime money maker struck a sensitive nerve in Stuttgart.
“Mercedes is not a restructuring or rescue case and he tried to implement the same strategy as at Chrysler. That went down badly,” the source said.
Hubbert argued that Bernhard had already “created a wave of resistance” and the top job wasn’t his yet.
The supervisory board decided last week “it is imprudent to say `give it a try’ when Bernhard had already managed to create quite a ripple in Germany,” a source said.
Bernhardt will stay on the board, but without a defined position. “He will not go back to Chrysler,” a company source said last week, adding: “We expect him to quit.”