A
second angry DaimlerChrysler German shareholder group on Friday urged the company’s
chairman to quit in a growing fight over who is to blame for a sudden slump at
the US-based Chrysler arm, Associated Press (AP) reports.
Critical Shareholders DaimlerChrysler, an umbrella for small shareholders in
the German-US company, demanded the immediate resignation of chief executive
Juergen Schrempp, saying he has cost them 70 billion marks ($US30 billion) in
lost stock value.
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The move rides a wave of US lawsuits that has rocked the Stuttgart-based automaker,
including a $US8 billion lawsuit filed last Monday by US investor Kirk Kerkorian,
DaimlerChrysler’s third biggest shareholder.
A few days later, another group of German shareholders said it would formally
petition DaimlerChrysler to fire Schrempp and dump its loss-making Chrysler
division during April’s annual shareholder meeting.
Adding to the acrimony was a DaimlerChrysler board member who suggested that
American executives withheld weak financial figures during 1998 merger talks
between Daimler-Benz and Chrysler.
"Apparently, Chrysler did not make available to us all the decisive figures
during the merger’s preparation stage,” supervisory board member Manfred Goebels
theorised in an interview with the business weekly Wirtschaftswoche. "Perhaps
our production experts were confronted with too few transparent facts during
their analysis of the Chrysler plants.”
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By GlobalData
But Goebels stopped short of saying merger mastermind Schrempp got duped. Schrempp
is in solid control, Goebels said, adding that the fundamentals of teaming up
with Chrysler were still sound.
Analysts said there is little evidence that Chrysler hid poor figures, adding
that the financial troubles at Chrysler, which rocked the partnership when it
posted a $US512 million loss in the third quarter, sprang up later in the game
from fierce competition and tight profit margins.
"I don’t see any signs of that,” Juergen Pieper, an auto analyst with
Metzler Bank in Frankfurt, told AP. "Chrysler had done almost everything
right for a couple of years, and they were simply too slow in reacting to the
competition that moved into their markets.”
Until the third quarter, the US-based Chrysler unit had been a cash cow, delivering
half the profits to DaimlerChrysler with its popular minivans and sports utility
vehicles. When other automakers rolled out similar models, DaimlerChrysler had
to lure customers with bargain promotions that ate into profits.
DaimlerChrysler shares were up 4.5 percent to 46 euros ($US20.50) in Frankfurt
trading on Friday, but they have lost about half their value since peaking in
1999 at a post-merger high.
