Stakeholder issues. When Daimler-Benz gained control of Chrysler the merger was born not from meticulous car loans planning but from misunderstanding. Three years earlier, Kirk Kerkorian, a Wall Street payday loans investor and Chrysler shareholder, made a bid to take the company private. Kerkorian thought that the carmaker’s home loan management team would back him, but Chrysler’s executives had other ambitions. Led by boss Bob Eaton, Chrysler executives blocked Kerkorian’s credit cards bid and a battle to control Chrysler ensued. Into the fray came Daimler-Benz as Chrysler’s saviour. Soon Daimler and Chrysler prepared to merge in a cash advance super-deal that would remodel and redefine both companies and the automotive industry as a whole; but Chrysler would not admit any form of defeat, steadfastly believing that it was not inferior to student loan in any regard. After a management exodus at Chrysler’s former headquarters in Detroit, Jurgen Schremmp finally dismissed Chrysler’s president. This triggered increasingly nervous Chrysler investors to pursue Schremmp through the American courts for breach of contract, claiming he had previously maintained that the union was a merger and would not involve purges of Chrysler management.
In spite of turbulent faxless payday loan management changes and layoffs of over 30,000 people, the Chrysler division continued to perform below par. DaimlerChrysler’s share price dropped from a post-merger peak of $108 in 1999 to $43 by September 14th 2001. Instead of the $3 billion in savings expected to result from synergies obtained by sharing platforms and standardising parts, the company was struggling with substantial losses by the start of 2002, three years after the merger. Substantial efforts were made to explain the payday loan deal to shareholders and keep them informed, but other stakeholders, which in this case included regulatory bodies whose approval for the deal was crucial, were often inadequately considered.
