Tell us what you really think: Lee Iacocca slams Daimler
There aren't that many people in the world who have a stronger emotional connection to Chrysler Corp. than Lee Iacocca, father of the minivan and savior for Chrysler during the early '80s. In an article featured in BusinessWeek, Iacocca reveals his feelings and thoughts about Daimler AG's sale of Chrysler to Cerberus Capital Managment, a private equity firm. In no uncertain terms, Iacocca comes right out and says, "Daimler screwed Chrysler royally." He argues that Chrysler was healthy, even powerful, before the merger, and has been left half dead by Daimler, which retreats back across the Atlantic to Germany as we speak (our eloquent prose, not his). Nevertheless, Chrysler's ex-CEO is optimistic about his old employer's fate, and makes a case for Cerberus being exactly the right kind of private equity firm to buy Chrysler.
Thanks for the tip, Alison!
[Source: BusinessWeek]
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It doesn't appear that Cerberus has plans to strip and flip the automaker to make a quick buck, and its management just may free current Chrysler CEO, Tom LaSorda, from the short leash which Daimler had tied him. Admittedly, we've been tough on good old Tom since the sale, indicating we though it was likely that Wolfgang Bernhard may eventually take his place. After reading Iacocca's words, however, it might be the case we now see a side of LaSorda that was stifled by his German bosses, and perhaps he is the leader to restore Chrysler to its former glory. There are many challenges ahead, however, so we'll keep Wolfgang's office warming present handy, just in case.
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Reader Comments (Page 1 of 2)
Aprime 4:20PM (5/18/2007)
He's right, I've never seen Chrysler in such a bad shape.
I barely see new Chrysler vehicles on our roads anymore. :\
At least Compass sales seem to be increasing, mainly because of that federal rebate.
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Dave T. 4:34PM (5/18/2007)
the real problem is the fact that every Automaker in the U.S. is a global automaker. GM and Ford have very healthy global units. GM is feeding its U.S. products with global design. Ford is starting to do the same, somewhat.
They need that global sharing to afford new model development with the costs of U.S. labor.
Chrysler now doesn't have that to draw on and will have to rely even more on its partnerships with other companies.
How will they afford hybrid and new fuel technologies without a larger company helping with R&D costs?
Just one example of the trouble they face.
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BCM 4:41PM (5/18/2007)
Remember that Iacocca also thought the LH cars were going to be a disaster. If he hadn't been eased out, no doubt the LHS would have arrived with wire basket wheels, a vinyl half-roof with landau lights, and a continental kit.
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rrr 4:46PM (5/18/2007)
#2 "How will they afford hybrid and new fuel technologies without a larger company helping with R&D costs?"
Yeah, its a good point, but you can make cars, sell them and make money without hybrids too. Have you seen Dodge Magnum? I swear 2006 Honda Civic looks better inside than Magnum. Chrysler needs to fix these things, improve quality, make great looking cars.
Example look at 300... inside it is a regular car, but it looks great so people want that car, same with Mustang...a regular car on the inside but the public can't get enough of it because of the way it looks, same with Camaro.
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mr.ed 5:19PM (5/18/2007)
He's living in the past. Chrysler, famed for its engineering, fell behind and got some neat stuff from Daimler. That connection's gone. See Chrysler slip slowly beneath the waves...after the wrecking crew from Cerberus sells off the good bits and writes off the rest.
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Bob-omb 5:12PM (5/18/2007)
Daimler gave Chrysler their only hits by letting the use that RWD Mercedes platform. Is everyone *really* going to blame Daimler for the current state of Chrysler, e.g. the hohum Caliber, Nitro, or Compass? I mean it's not like they fired Chrysler's design team -- someone's gotta take the blame for those interiors at the very least.
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terry 3:22PM (8/05/2007)
That is aload of crap! Many (as in almost all) of the good guys @ Chrysler either left soon after the "merger" or were dumped by the nazi's @ Daimler. Chrysler was a good solid money making company UNTIL Daimler took over, ransacked and screwed up the company. Just ask the guys who left or were canned... or a Chrysler dealer. All of the things that made Chrysler a good company were removed and replaced w/red tape and slow moving German mangement. Things can only get better for Chrysler now. We can only hope that they will completely divorce from Daimler over the next ten years AND hoepfully from the other loser, Mitsubishi.
mavkato 5:18PM (5/18/2007)
is Daimler going to let Chrysler keep the MB parts used in the LX cars, or is Chrysler going to have to redesign those parts? I assume the LY will not have any Daimler parts??
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Mike 5:29PM (5/18/2007)
Oh Lee, bring us back the K car!!!!
:-D
Nothing like a Reliant wagon h aha ha ah ahha.
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Yago bal 5:35PM (5/18/2007)
If Chrysler was so good, and Mercedes-Benz so bad, Mercedes wouldn't have the healty funds to buy to group in the first place.
Mercedes was -and is- good: if they couldn't turn the already sinking Chrysler Group around, it must be Chrysler's fault, in my own view.
In fact, they are so good they knew when to leave.
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terry 3:30PM (8/05/2007)
Are you crazy? Obviously you have not followed this sham of a "merger of equals". Chrysler in the mid-90's was THE most profitable automaker in the world (per unit). They were the envy of the business. The way Chrysler was structured and the team they had was WHY they were so successful. Enter Daimler, who wanted an American connection, who changed the fast paced quick decision manegment style to the ever-so-slow German way of having meeting after meeting at all levels to make the simplest decisions. The Germans did not like the headstrong American leaders of the company, so they made their lives miserable enough that most of them lest--- and those that did not leave or conform were cast off. After ruining the company and spending all of Chrysler's cash, they then declare that "buying" Chrylser was a mistake. If they had only known "what rough shape it was in". What a load of crap. The Germans screwed it up and would never take the blame. Yes, there has been some good things that happened but mostly BAD. And who says Daimler is such a brillian company? Their quality stinks-- even Europeans think so-- that is why they are buying Japanese. Chrysler was the only automotive group at Daimler of late that was making any money! Chrylser willdo JUST FINE w/out the Germans and hopefully they can re-divorce from Mitsubishi also. Cerberus will make Chrysler a great company AGAIN. You just wait and see!
dt 5:38PM (5/18/2007)
Daimler will still have a 20% share of Chrysler and they have already said that they will continue to jointly share technologies such as hybrids, diesels, etc. It's also likely that there will be other collaborations with other manufacturers (ie. Daimler/GM/BMW 2-mode hybrid).
Yeah, Mercedes "let" Chrysler use their last generation RWD platform. They also "let" Chrysler pay consulting fees to subsidize and develop new systems for their own platforms. That money has to come out of the product somewhere to maintain a price point - evidently it was out of the interior development for Chrysler.
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dt 5:43PM (5/18/2007)
Yago bal,
They were smart enough to sell now because they knew that they had sucked as much resources out of Chrysler as possible without completely burying the company.
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Don 5:53PM (5/18/2007)
I'll tell you this much: I'll sell my soul rather than buy a Daimler product...the leaches.
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Arne 6:05PM (5/18/2007)
I think, they should thought about Design, Quality!!! and more than as other companies know: about Technics. Chrysler should never become a Mercedes Status or sth like that. It's US, it's own!
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Barney 6:15PM (5/18/2007)
Lee seems to forget why he was an icon. He dragged Chrysler from the hole once before. He even demanded once, that Japan be "forced" to show how they kept the yen so strong. He wasn't concerned why the American dollar was dropping, as much as why others currency was doing well. Perhaps Iacocca has been out of the auto industry so long and had not realized the peril Chrysler was in. Daimler BOUGHT Chrysler and SOLD Chrysler. In neither transaction was that car company ever considered a profitable gem. It's merely a name that the Americans associate as being theirs and the patriotism would buy cars because of it. The new owners bought the company as if it was a wreck from the salvagers and with some value left in the parts. It's been a very long time since Chrysler was ever prosperous.
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whofan 6:22PM (5/18/2007)
I hope Chrysler will rebound. In 1998 they were a great company. Now days with a great majority of Americans thinking the Japanese companies only build great cars, were screwed. What made us a world power? Let me see here! Fat dumb lazy above all stupid. Some of here get it unfortunently most don`t. God bless the big three. My children may not have it as good as I have.
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whofan 6:24PM (5/18/2007)
Now that Chrysler will be American again I`d rather be pushed in a Dodge than drive a Toyota!
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PeterB 6:55PM (5/18/2007)
"Daimler gave Chrysler their only hits by letting the use that RWD Mercedes platform."
I'd really love this "The LXs were based on a E-Class" BS to die already.
Fact: The LX cars were already RWD and nearly finished before Daimler got involved.
Fact: they delayed intorduction of the new cars by a year and a half, so they could get Chrysler to use Mercedes parts inside them.
Fact: Dodge had no full-size car due to above delays for nearly a year becuase the Intrepid was already slated to be killed off right before Charger production was supposed to be launched. This hurt sales.
Fact: Production of the ME-412 supercar was killed off because Daimler's McLaren SLR supercar was put to shame by a car thrown together in SIX MONTHS by Chrysler engineers using some an AMG sourced engine.
Everyone also seems to conviently forget the new Mercedes M-Class borrows very quite a bit of hardware from the Jeep Grand Cherokee, and its no longer one of the most un-reliable vehicles out there, unlike the original all Daimler designed model.
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Biff Baxter All American 6:44PM (5/18/2007)
He's correct, of course.
Not only did they suck it dry, they did it in a totally incomponent manner.
It's easy to see the same sort of management style that thought it could win a major war by fighting on two fronts.
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