A power struggle is taking place within the supervisory board of DaimlerChrysler, over the recently confirmed tie-up with Chinese manufacturer Chery.

DaimlerChrysler is planning for Chrysler and Chery to jointly produce small cars in China. Chrysler CEO Tom LaSorda has said a new small car could be launched on the market by 2009 but Erich Klemm, chair of the DaimlerChrysler works council, believes it is the wrong strategy to have cars built by another manufacturer sold under any of the DC brands.

The timing of the agreement is also of concern. There have been rumours that one of the large Chinese automotive conglomerates, namely FAW or SAIC, might be interested in partnering with Chrysler. Klemm told Handelsblatt that DaimlerChrysler should not open doors to the Chinese automotive industry, which is expected to become a significant competitive threat over the coming years.

Klemm also criticised the shareholder structure of DaimlerChrysler as unsustainable. He said that BMW and Porsche operate in a much more stable environment because they have dominant family shareholders.

The struggle could influence the future sale of Chrysler if management and workers' representatives on the board are not in agreement.