US-based auto industry commentator Jerry Flint says DaimlerChrysler's decision to stop further investment in Mitsubishi could spell the beginning of the end for the group's chief executive, Jurgen Schremmp.
Auto industry commentator Jerry Flint says DaimlerChrysler's decision to stop further investment in Mitsubishi might spell the beginning of the end for the group's chief executive, Jurgen Schremmp.
CARtoday.com reported on Friday that DaimlerChrysler had decided not to participate in a rescue capital increase planned by Mitsubishi Motors because it could not agree to an acceptable deal with other shareholders in the Japanese manufacturer's group.
Because DaimlerChrysler said it would not provide any further financial support to Mitsubishi, a rumour arose that the multinational might sever its ties with the Japanese manufacturer. A source told that the 37 per cent stake DaimlerChrysler held in Mitsubishi would be booked as discontinued business until a buyer was found.
But DCSA group media manager Deon Ebersohn said: "There is no truth in reports that DaimlerChrysler will sever its ties with, or sell its stake in, Mitsubishi Motors".
However, Flint told that there would nevertheless be fallout as a result of DaimlerChrysler's decision.
"I strongly suspect that the DaimlerChrysler board finally is getting sick of the global strategy of its own chief executive, Jurgen Schremmp. His tactics led to massive investments in Chrysler (a takeover), in Mitsubishi and Hyundai.
"Schremmp's ambitious plans have stumbled badly, and the distractions have apparently hurt Mercedes-Benz, where the reputation of the German make's vehicles has dropped.
In addition to the Mitsubishi setback, the company is involved in a nasty lawsuit over Schrempp's infamous "merger of equals" of Chrysler and Mercedes (Pressing his claim for more than R6,7 billion in damages, Las Vegas casino mogul Kirk Kerkorian recently insisted the merger that created DaimlerChrysler was a fraud).
"I am not ready to say that Schremmp is being driven out of the company, but how much longer can he last?" Flint asked.
Furthermore Flint said DaimlerChrysler's decision about Mitsubishi could have been a ploy to get a better deal from other owners of the Japanese company or the Japanese government. While DaimlerChrysler owns more than a third of Mitsubishi, the remaining owners are other companies in the Mitsubishi group.
Original article from Car