By: Jeffrey Ross
Autotropolis.com
Almost nine years to the day since the announcement of the merger and exactly three months to the day since the announcement of a possible sell off, the Daimler and Chrysler names will once again stand alone. It was announced today that Cerberus Capital Management, a private equity firm, purchased an 80 percent majority holding of the Chrysler Group for $7.4 billion. Compared to the $36 billion that Daimler-Benz spent to acquire the Chrysler Corporation, this merger will probably go down in history as one of the costliest and biggest failures of all time.
In 1998, when Daimler-Benz paid $36 billion to form DaimlerChrysler, the transaction was labeled a merger, but after nine years it’s clear that the deal resembled more of a takeover than anything else. The first big event to take place after the “merger” was the discontinuation of the Plymouth brand in 2001. While the demise of Plymouth can hardly be blamed on Daimler, the death of such a once proud brand, that produced cars such as the Road Runner and the Barracuda, marked a sign of things to come for the Chrysler Corporation (other than the limited-production Prowler roadster, the last Plymouth-specific car was a rebadged Mitsubishi Eclipse the 1990-1994 Plymouth Laser).
While the two companies appear to be walking away from the deal as equals, this situation more closely resembles a neglected spouse finally able to escape a relationship. After this particular nine-year relationship, the only successful Chrysler car that used Daimler’s technology was the 2005 Chrysler 300 and Dodge Magnum (followed by the 2006 Dodge Charger). The LX-platform cars used suspension components from 1996-2002 Mercedes-Benz E-Class and the 2000-2005 Mercedes-Benz S-Class – hardly the platform sharing that most manufacturers benefit from.
The success of the LX-platform was severely overshadowed by other platform-sharing projects that failed miserably or were blatant badge-engineering experiments that showed the neglect towards DaimlerChrysler’s U.S. products. The Chrysler Crossfire in concept form drew rave reviews from the media and the general public alike, but by the time the production Crossfire came into fruition in 2004, it was little more than a watered-down, rebadged 1997-2004 Mercedes-Benz SLK-Class. Compared to the Crossfire, the Dodge Sprinter could be called a huge success, but it was little more than cost cutting at its best. With Dodge’s full-size B-van over 30 years old, Dodge was given a Mercedes-Benz Sprinter van with minor badge and grille changes to take its place. The Mercedes-Benz Sprinter was introduced in 1995 and it wasn’t until 2001 that the Sprinter even saw U.S. soil (as a Freightliner Sprinter). The Dodge Sprinter hit showrooms in 2003.
It can be argued that attempts were made to share knowledge and technology, but Daimler’s neglect toward Chrysler is painfully obvious in regards to one car especially: the Pacifica. For argument’s sake, the Crossfire did have a sleek and sporty look and even a peppy SRT-6 model, but the sales never amounted to anything and led to the car’s demise. The Sprinter, on the other hand, is actually quite a success competing against the Ford’s class-dominating E-Series vans, but the lack of individuality from the Mercedes-Benz and Freightliner versions is a definite negative point. The 2004 Chrysler Pacifica represented the first all-new vehicle under DaimlerChrysler. Maybe the Pacifica, a minivan-based crossover, was a few years ahead of its time, but that being said, when the similarly marketed Mercedes-Benz R-Class hit the market just two years later the Pacifica was clearly inferior. Despite being built from the same company, and even carrying the same “sport touring vehicle” label, the R-Class was dominant over the Pacifica in just about every category.
In fact, the only vehicle from the Chrysler Group to be shared with other DaimlerChrysler nameplates won’t be available for months after the de-merger. Sterling, a medium- and heavy-duty truck manufacturer and subsidiary of Freightliner, will receive the Bullet this fall. The Bullet is nothing more than a rebadged version of the heavy-duty Dodge Ram 4500 and 5500 cab and chassis.
Assuming Cerberus doesn’t send the newly formed Chrysler Holdings LLC to the financial chop shop, the separation of Chrysler from Daimler is a step in the right direction. While Cerberus will take over Chrysler with zero debt, the company will be responsible for almost $18 billion in current and former employee benefits including health care and pension.