It’s always a nasty moment when you announce your resignation and the share price whistles up by 10%.
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For Jurgen Schrempp, who has worked for Daimler Benz since he was 16 and who as chairman pioneered the world’s biggest industrial merger (with Chrysler), the taste must have been particularly bitter. He would have liked his shareholders to have expressed disappointment with a little drop in the share price.
To say that his premature end is a surprise would be an understatement. It was only a year ago that he signed a new three-year contract with the supervisory board. Despite the diligent probing of analysts during today’s conference call to discuss the half year results, Schrempp and his colleagues denied any sort of rift or blame. Schrempp stays on as chairman of DaimlerChrysler until the end of the year. That will probably be in prestige only. His replacement has already been named as Dieter Zetsche currently head of the (improving) Chrysler group. Double-barrelled chairmanships never work.
Can we be certain that the share price rise was not created by the brilliance of the financial figures announced? Absolutely. They were good enough – just – in that the board was comfortable to stick with the full year guidance produced three months ago that despite a number of problems the profit at the end of the year should be better than in 2004. That sort of tentative remark does not generally make a company worth an extra €4 billion over lunch.
Is he therefore going to take the blame when his successor is in a position to redraft history a little? There is much to take the blame for. DaimlerChrysler now is worth less than was Daimler alone before the merger. Trading will have to go very well for a very long time to give shareholders their money back. Secondly, Schrempp was single-handedly responsible for the $8 billion legal row when he described DaimlerChrysler as a takeover rather than a merger. Law suits still rumble on over that single badly-selected boastful word.
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By GlobalDataThe poor supervision of Mitsubishi Motors and its lawlessness happened on his watch. So too did the misdirection of the Smart brand. Latterly, the peerless reputation of Mercedes was blown into the long grass by inadequate product testing.
To be fair, management of the world’s biggest-ever industrial margin has to be more than one man can manage alone. But there is as yet no known escape from the blame culture that is the only revenge of unhappy shareholders.
Schrempp began his contribution to the illusion of harmony at the end of his chairman’s statement announcing board changes. “And on a personal note, I am a very happy man.”
Was he going to apply for a place on the supervisory board? “There is no intention for me to sit on the supervisory board.” Who approached who about resigning? Did he approach the board or vice versa? “We approached each other.” Yes, but who approached who first? “I can’t say that exactly in terms of seconds.” How long ago? “Some time ago. It was a masterpiece that there was no leak.” Why now, so soon after signing for another three years? “There were still a lot of ‘building sites’ in the companies. I would not have left my post.” What is your legacy, asked James Mackintosh for the Financial Times. “The end of the year is the time to reflect, Mr.Mackintosh. Perhaps we can have a longer conversation at another time.”
Now that is a weird one. Was it not the self same Financial Times who caught Schrempp with his foot in his mouth in an exclusive interview when he first said that Chrysler was always going to be a takeover rather than a merger?
If that interview happens at the year end, it rates as a must-read.
Rob Golding
