DaimlerChrysler Co-Chairman Says He Is Retiring
DaimlerChrysler co-Chairman Robert Eaton, the former Chrysler chairman and chief executive who helped orchestrate one of the world’s largest industrial mergers, will retire from the company March 31.
Eaton, 59, made the announcement Wednesday at a meeting of senior managers, saying that “this is the right time for me to go.”
“This, of course, should be no surprise to anyone,” he said. “I’ve said from the very beginning that when this merger is complete, I would be retiring. The time is now.”
When Chrysler and Daimler-Benz of Germany agreed in May 1998 to merge, Eaton said he would share the job of chairman with Daimler-Benz’s Juergen Schrempp for no more than three years, then retire.
His departure now “probably doesn’t mean much,” said David Healy, auto analyst for Burnham Securities. “He’s effectively been a lame duck for some time.”
Although the marriage was originally billed as a merger of equals--with dual headquarters in Stuttgart, Germany, and Auburn Hills, Mich.--DaimlerChrysler has become a German-American company with the emphasis on German. Most of its stock is held in Germany, the company is incorporated under German business laws, and a majority of upper-level managers come from Daimler-Benz.
The two firms have found billions in savings through the merger, and analysts expect to see more mingling of efforts in such areas as engineering, research and component purchasing. But as auto companies, the former Chrysler and Mercedes-Benz divisions are run as separate entities, with little interference in U.S. day-to-day activities from Stuttgart.
In fact, Eaton’s retirement announcement follows a restructuring in October of the company’s North American operations that was heralded at the time as a clear sign that Germany acknowledged the need to give the former Chrysler operations more freedom.
The reorganization came after the departure in September of Chrysler Operations President Thomas Stallkamp, who had been considered Eaton’s heir apparent.
In his place, longtime Chrysler executive James Holden was named head of U.S. operations, and Chrysler design chief Thomas Gale was given command of product planning as well.
Eaton, a mechanical engineer, joined Chrysler in 1992 after 29 years at General Motors Corp. He was promoted to chairman and chief executive Jan. 1, 1993, replacing Lee Iacocca. During Eaton’s tenure, Chrysler reworked itself from the weakest of the U.S. Big Three auto makers into a highly profitable company.
But he also came to believe that Chrysler could not face the future alone--that only a handful of auto makers could compete globally.
He and Schrempp, who now becomes sole chairman, began talking about a possible combination at the January 1998 Detroit auto show and announced the $32.8-billion deal four months later.
“I don’t think you’ll ever end up with one culture,” Eaton said Wednesday, addressing continuing concerns among analysts and shareholders about how well the two companies have meshed. “We want to have the culture of wherever we work around the world. I feel very good about the synergies we’ve produced so far.”
DaimlerChrysler shares lost 81 cents to close at $67.19 on the New York Stock Exchange.
* FORD EARNINGS
The auto maker said quarterly profit rose 8% on higher sales of SUVs. C3
