April 3, 2005

NOT A BUSINESS FOR DEVELOPED NATIONS:

Daimler's Dumb Decisions (Dan Lienert, 04.01.05, Forbes)

The news coming out of DaimlerChrysler the past two days has been extremely bad, even if it might not sound that way at first.

Yesterday, Daimler announced a worldwide recall at its Mercedes-Benz subsidiary. The recall will affect 1.3 million cars. Today, the carmaker said it's planning a $1.6 billion overhaul of its unprofitable Smart line of compact cars.

Based on today's share price movement, the ADRs are down 72 cents, or 1.61%, to $44, in midafternoon trading, the shareholders aren't happy about the announcements. And they shouldn't be since they demonstrate the problems plaguing Daimler from top to bottom--from its premium brand to its most humble vehicles.


Chrysler was only the first of the Big Three to die--the other Two will follow shortly.

Posted by Orrin Judd at April 3, 2005 10:27 AM
Comments

It looks like Chrysler's quality control system took over at Mercedes rather than the other way around.

Posted by: bart at April 3, 2005 6:41 PM

oj, i know they weren't one of the big 3, but let's not forget a moment of silence for the passing of AMC.

bart: all german cars have poor quality, these days.

Posted by: cjm at April 3, 2005 7:07 PM

Bart:

Tell me about it. In the first 6 months I owned my 2003 MB E class, it was in the shop over a month. About $12k value of repairs so far under warranty and the electronics are still not fixed. With the squeaky brakes (considered normal), you can hear me coming a mile away. Those new recalls apply to my car as well.

The only thing that matches the poor quality control is the major attitude on the part of MBUSA. I am NEVER going to purchase another MB.

Posted by: Rick T. at April 3, 2005 10:26 PM

It's a great joy to see Hitler's favorite car maker go down in flames. It's a pity for Chrysler though.

Posted by: Peter at April 4, 2005 3:31 AM

Almost all big mergers end in disaster. Name one that hasn't. If you own stock and one is announced, sell.

Posted by: Chris Durnell at April 4, 2005 5:23 AM

A neighbor of mine owns a "smart" car. Sheesh, that thing looks like it has already been squished in an accident. 0-60 in 20 seconds! It can't even get out of it's own way, much less that of a Suburban.

Look for G.M. to close down Pontiac and Buick, shut down half its plants to scrunch the unions and then open a few in Alabama and China.

Posted by: Randall Voth at April 4, 2005 8:54 AM
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