BUSINESSWEEK ONLINE : AUGUST 7, 2000 ISSUE
INTERNATIONAL -- COVER STORY "The Point Is, We Are a Solid Company" (int'l edition) Investors on both sides of the Atlantic are wondering: Does Jürgen E. Schrempp know how to manage DaimlerChrysler effectively? Yet Schrempp is supremely confident that this merger will prove a winner. He spoke to Business Week correspondents Christine Tierney, Matt Karnitschnig, and Joann Muller in his headquarters office in Stuttgart on July 19. Q: Why is DaimlerChrysler's share price so low, and when will it improve? A: When? Well, I don't know. I'm very impatient. We have a multiple like Ford or GM, 8 or 9. This doesn't reflect our potential. Look at our profit contribution coming from two sides of the Atlantic.... The other companies don't have that. [But]... I'm not worried at all. Q: But what can you offer investors to reassure them? A: We have a structure where we are now able to cover the world, and we have the whole spectrum of products, and we are the most technologically intensive car company in the world. I have no doubt that eventually the markets will realize...DaimlerChrysler is a unique company uniquely positioned. Q: How do you convince the analysts who complain that you're not doing enough to cut costs? A: I'm amazed that analysts only talk about cost and efficiency. I'm talking about product innovation. Look at the new C-Class car. It's the best car in the world, and its innovations give us the margins.... That's the problem I always have with people who think efficiency and cost is everything. [You can] build a heap of crap at low cost and sell it, too, but you won't make money. Q: What's the logic of moving into small cars and not concentrating on luxury cars? A: This turf must be defended, and we have to accept that competition is becoming fiercer [in the luxury segment], so we have to cover the whole field. So when an analyst says, ''Why didn't they just stay in a high-margin business?'' I say, ''Where in this world can you peacefully stay in a high-margin business if you are not going to defend yourself?'' Q: What does your stake in Mitsubishi Corp. give DaimlerChrysler? A: It gives us a tremendous opening to Asia. It gives us access to what we need--small-car competence. Just imagine: We are opening up the sales network of Chrysler to sell Mitsubishi products, and you could overnight have a tremendous positive impact. Q: It's been two years since the merger with Chrysler. What's your assessment? A: We are now one company. It's working well. It will be proven that not only the preparation for that merger but also the implementation of that merger...will be the best ever. At present, the merger is judged on the basis of the stock, which I appreciate is not where it should be. But that's not the point. The point is, we are a solid company. Q: Yes, but how do you respond to criticism that you're too hard on Chrysler? A: I'm running one company. I'm running a company in South Africa, Australia, in Germany, the U.S., Brazil. Nobody asks me what [cost-cutting] means for Brazil. Q: What will Daimler look like in 10 years? A: Within the next 5 to 10 years, we will have implemented what I've told you. Secondly, we will be increasing our service content in terms of percentage of revenue, which is very profitable. And thirdly, we will prove to the world...that there is not a separation between the Old and New Economy. It's just that the Old Economy, as people stamp us, has taken a little while to understand that it needs those New Economy tools, too. We will be applying them rapidly. In five years, this company will be considered a New Economy company. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Defiant Daimler (int'l edition) INT'L COVER IMAGE: Defiant Daimler CHART: Schrempp's Scoreboard TABLE: DaimlerChrysler's World PHOTO: DaimlerChrysler A-Class Small Sedan PHOTO: Mercedes C-Class Sedan ``The Point Is, We Are a Solid Company'' (int'l edition) INTERACT E-Mail to Business Week Online

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