BMW and Daimler consider swapping shares in cross-ownership plan
Luxury automobile sales have been hit especially hard during the global economic disaster, and Daimler and BMW may become much closer allies as a result. German magazine Der Spiegel published a report stating that the two luxury giants are working to combine their purchasing power to save hundreds of millions of dollars. But the really interesting cooperation will reportedly happen in the form of a stock swap.
Under the alleged agreement, each company would give the other a 7% stake in the other. The move would strengthen the German automaker's new bond and perhaps lead to further cash-saving collaboration down the road. The magazine reports that the Quandt family, who own 46% of BMW, isn't keen on the idea due to Daimler's 1998 takeover of Chrysler. But the German government has allegedly been contacted to gauge the possibility of overriding any opposition to the deal. Talk of a BMW/Daimler tie up have been circulating for years, but the rumor tree has yet to bear any fruit. Due to the shabby state of the global automotive market, that could change quickly.
[Source: Automotive News - Sub. Req.]
Reader Comments (Page 1 of 1)
Richard S. 10:31AM (3/09/2009)
I don't it think it makes sense for these mortal enemies to some how link themselves up financially. The only thing that makes sense is to jointly purchase or develop items that both use anyway such as electric motors, ABS systems, raw materials, etc... in order to get economies of scale, sort of the same GM-Ford 6-speed auto transmission JV.
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ChrisS 10:56AM (3/09/2009)
I think GM-Ford is a bad example. Primarily b/c they really don't work together. The Germans do a very good job of thinking 'big picture'. Meaning, what can we do to ensure our companies not only survive, but thrive- ensuring our employee's have jobs - what's best for our brand, today, tomorrow and the future?
I can hardly say the same for the Big 3.
I think this is good business and a great way to ensure that they not only survive this economy but keep the future bright for all involved with these companies.
Cheers!
Throwback 1:23PM (3/09/2009)
I agree, these are 2 of the fiercest competitors I can't see them agreeing on anything.
jamie 10:43AM (3/09/2009)
Ha! Merger of equals...and they speak the same language too!
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caddy-v 10:45AM (3/09/2009)
Hey BMW, come closer. I want to whisper a secret in your ear. You have enouph problems of your own, you don't need to add to them. Just take a look at what MB did to Chrysler and nuff said.
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ChrisS 10:58AM (3/09/2009)
Caddy-V, I'm sorry, what MB did to Chrysler?
Mmm okay. So what's GM or Fords excuse?
Typical close minded thinking. The exact thinking that's gotten our 'beloved' Big 3 into this mess.
Keep buying Caddys.
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caddy-v 12:49PM (3/09/2009)
Close minded?? I think not. I can't imagine how that came into play unless your mentor is SeaUrchin.
Are you aware of the FACT that Chrysler was profitable and had an estimated 20B in cash assets when Daimler bought them and proceeded to cheapen the brand even more than what they were and use the cash for Daimler's home operation.
And yeah, I'll keep buying Caddys. BMW may have been a way off in the distant choice, but having anything to do with MB would scuttle that in a heartbeat.
ChrisS 1:04PM (3/09/2009)
All due respect myfriend but you're sipping some serious domestic kool-aid. Chrysler would be a s**tshow even IF MB never had them.
But, don't believe me. You domestic sippers keep thinking what you do. History will show that mentality is one of the worst mistakes ever made.
earlofhalflight 5:37PM (3/09/2009)
Daimler just did to Chrysler what Chrysler did to Simca and Rootes. What goes around comes around.
LX builder 11:28AM (3/09/2009)
Hey ChrisS
You seem a bit uninformed, what part of running into the ground do you not understand. If BMW is smart they will pass on this one.
GM and Ford have entirely diffrent problems than Chrysler, they we not stripped of their engineering capability and saddled with sub standard product, or have all their cash stolen by the the bandits of Stuttgart.
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Jizzy 12:26PM (3/09/2009)
this can mean one thing and one thing only: Audi is posing a bigger threat than we think.
ps it can mean more than this one thing (probably does) but I think Audi is giving both companies a little scare.
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Chazz 12:45PM (3/09/2009)
BMW better note the previous relationship Mercedes had with Chrysler. If BMW doesn't stand it's ground it liable to take it up the bum just like what Mercedes did to Chrysler - it's called the "MATE-DATE DRUG" next thing you know you're screwed!
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Geeky1 12:57PM (3/09/2009)
Somehow I'm not feeling particularly enthusiastic about the whole concept-not so much the cross-ownership plan described here but the possibility that it could lead to something beyond that (like one company taking over the other).
BMW and Mercedes may be direct competitors in most peoples' eyes, but the approach they take to building cars (albeit less so now, with both companies-BMW in particular-trying to invent new niches on seemingly a weekly basis, than 10 or 20-or even 5-years ago) is very different, imo. BMWs tend to be much sportier cars than Mercedes are; an E class might put down similar performance numbers to a comparable 5 series, for instance, but the BMW is going to go around a track without complaining about how such behavior is undignified, uncivilized, and not something that should be undertaken in a $70k luxury car to the same extent that the E will.
And as someone that appreciates both cars for what they are, I can see collaboration between the two companies resulting in the dilution of both of their products to the point where the whole BMW and Mercedes model lineups blend into this quivering mass of generic blandness with very little to separate one company's products from the other. Yuck. This is potentially a very slippery slope, if the rumors turn out to be true this time.
And Jizzy; "this can mean one thing and one thing only: Audi is posing a bigger threat than we think." It's hard to be a threat to anyone when you spend most of your time after your warranty expires either on a lift, on a tow truck on the way to a lift, or waiting for a tow truck to pick you up and take you to a lift.
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Stéphane Dumas 5:15PM (3/09/2009)
I think BMW should jump in Fiat's bed instead of Mercedes bed, use Mercedes bed as a last resort
http://www.autoblog.com/2009/01/28/fiat-to-jump-into-bed-with-bmw-too/
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dcsbeemer 8:07PM (3/09/2009)
I think that this isn't necessarily a bad idea. If you want to know what MB will do in the next 5 years, look no further than BMW for hints, and vice versa.
Sure, BMW is more sporty and MB is more luxo, but they both produce the same kind of cars in the same segments for the most part.
And I do think Audi is a bit of a threat at the moment. Maybe not Audi itself, but the whole Porsche-VW-Lambo-Bugatti-Skoda-Seat-Bentley-Audi (did I miss one?) company. It's very easy for Wolfsburg to build cars with all the best bits these days, Porsche (who owns Audi) makes more money trading stocks than what they do in the automotive industry. A hell of a lot more in fact.
MB and BMW on the other hand, they're car companies first and foremost. Car industry takes a knock, so do they.
Teaming up on certain things may just be what the doctor ordered.
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M 1:00AM (3/10/2009)
What about BMW being so proud of their "independence"?
Remember those ad campaigns a year or 2 ago?...
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nagmashot 4:15AM (3/10/2009)
guys you have to look at Mercedes history...
back in 1958 Mercedes bought the Auto Union (Audi) Mercedes engineers codevelopt such important models like the Audi F103 which was the basic model for the Audi 80, Audi 100 and VW Passat.. the six year Mercedes ownership of Auto Union had created the technical basis which allowed Volkswagen to survive the end of the beetle hype. There Mercedes ownership helped two car companys to survive... Audi and Volkswagen...
it is not the first time that BMW and Mercedes get close... in 1959 Mercedes wanted to completely buy BMW, thanks to hard fighting BMW worker and dealer they stoped the Mercedes plans to take over BMW... after that Quandt increased his stock in BMW to reduce the impact of banks ...
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Ebenezer 4:40PM (3/10/2009)
I don't know what to think of this. BMW is one of the most popular Auto car makers in the world. Does Daimler even make cars anymore?
Wait, am I missing something? Daimler still exists?!?! ahah
I think any Auto Industry company is just trying to bring back the economy.
If it works, so be it!
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Ebenezer 4:41PM (3/10/2009)
For great BMW classifieds, visit: http://www.lemonfree.com/map.php?make=BMW
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