Change Management in Daimler AG

Daimler AG
• Daimler AG is the thirteenth-largest car manufacturer and
second-largest truck manufacturer in the world.
• Daimler is known for its brands of Mercedes Benz and
Maybach series.
 Changes in the Organisations Timeline

• Daimler Motoren Gesellschaft AG, 1890–1926

• Daimler-Benz AG, 1926–1998
• DaimlerChrysler AG, 1998–2007
• Daimler AG, 2007–present
 Merger with Chrysler
• In 1998 Daimler Benz AG merged with Chrysler.
• Chrysler was an American auto maker which operated only in
the US.
• At that time, considered as the largest trans-atlantic deal.
 Needs for the change/merger

• Chrysler wanted to enter the international market and was

facing some financial probs.
• Daimler AG had a strong financial foundation and operated in 21
countries and wanted to diversify.
 Reasons for the Failure to Change
• Daimler AG being a German company was rigid in its policies.
• The American Chrysler company was propelled by innovative
ideas and followed an extremely free culture.
• Cultural mismatch.
• While Daimler-Benz’s culture stressed a more formal and
structured management style, Chrysler favored a more relaxed,
freewheeling style.
• Heavy losses in the range of $ 5 Billion due to Chryslers lack of
inventory control.
• Chrysler laid off several key employees after the merger.
• German management tried to dominate the Chrysler
operations.
• Major shareholders like the Deutche Bank wanted out.
• Total value of DaimlerChrysler stock fell by $ 9 B.
 De Merger of Daimler AG and Chrysler

• Daimler approached and tried to sell Chrysler to Volkswagen,

Renault-Nissan and Hyundai but was turned down.
• Finally sold Chrysler to Cerberus Capital Management in New
York for $1.35 B.
 Impact of the Changes

• Daimler CEO resigned after the fall in share price.

• Chrysler employees accused Daimler of bribery and
corruption in developing nations.
• Daimler AG settled out of court with the bribery and other
allegations filed against it.
• Daimler lost around $ 30 B to the merger and eventual pull
out of Chrysler.
Thank You