At Daimler-Benz, Schrempp Is Firmly in Driver’s Seat

In its merger deal with Daimler-Benz, Chrysler Corp. confronted one of the toughest captains of German industry in Daimler Chairman Juergen Schrempp.

Details aren’t yet known, but the deal between the two companies promises to leave the clear stamp of Schrempp, one of the most admired and feared of Germany’s industrialists.

Schrempp, recently accused by predecessor Edzard Reuter of “ruthless brutality,” took over Daimler-Benz in 1995 and has since coldly slashed unprofitable business, sometimes clashing with his own top management.

Although his methods might have been controversial, there is no question Daimler has prospered under Schrempp’s leadership. He is credited for almost single-handedly introducing the concept of “shareholder value” to Germany.

The company has seen profit and sales surge to record levels and, in an unusual display of corporate openness, earlier this year published clear sales targets for the next several years that lay down ambitious turnover goals.

Within months of taking over, Schrempp jettisoned much of Reuter’s visions for the company, steering Daimler back toward its transportation roots and away from his one-time mentor’s dream of turning it into a diversified technology company.

First on Schrempp’s chopping block was Dutch aircraft maker Fokker. Daimler had bought it only in 1993, but under Schrempp, the German conglomerate cut off life-supporting funds for the money-losing company, sending it into bankruptcy and costing hundreds of Dutch jobs.

Schrempp then turned his attention to streamlining Daimler’s top-heavy management structure.

The Daimler chairman won wide praise for cutting away layers of middle management, but the restructuring also led to an internal fight over the future of Mercedes-Benz, resulting in the eventual resignation of highly respected Mercedes boss Helmut Werner.

Schrempp’s reputation as a cold-hearted executive was further reinforced this year when former Daimler boss Reuter published memoirs that included a stinging attack on Schrempp.

Reuter accused Schrempp of “ruthless brutality” and questioned his successor’s willingness to rack up what was a record loss of $4.08 billion in 1995 as part of restructuring and write-off costs.