On May 7th 1998 two of the world’s leading car manufacturers, Daimler-Benz and Chrysler Corporation, announced the largest industrial merger in history. The new company, DaimlerChrysler, was the world’s fifth-largest carmaker with revenues of $130 billion, an operating profit of $7 billion and a workforce of more than 420,000 (see table).
Chrysler and Daimler-Benz were strong in two different markets: North America and western Europe respectively. The merged company, DaimlerChrysler, was designed to force its way into new markets, particularly in Asia but also in South America and eastern Europe. New markets require new products that are tailored to their needs, and the combined forces of these motoring giants were seen as having the capability to innovate effectively. In July 2002, against a backdrop of continuing economic uncertainty and turbulence on the world’s stockmarkets, DaimlerChrysler
announced higher than expected profits compared with the previous dismal year, signalling to the world that the merger had at last started delivering some of the long awaited benefits. However, the early years of the merged business were difficult and painful, and it is still far from certain whether one set of good results will translate into long-term success.
