Question

Assess the international perspectives of Eaton and Schrempp.

Answer 1

Answer:

Assess the international perspectives

Background

Lee lacocca, the colorful Chrysler Chairman left Ford for Chrysler because of a clash with Henry  Ford II in 1978. He is credited with saving Chrysler from bankruptcy in 1979/1980, when he negotiated a loan guaranty from the US government. Iacocca also led Chrysler’s CEO who negotiated the 1998 merger with Daimler, replaced Iacocca in 1992.       At the time of the merger, Daimler was selling fewer vehicles than Chrysler, but had higher revenues. Daimler’s  300,000 employees worldwide produced 715,000 cars and 417,000 trucks and commercial vehicles in 1997. The company  was also in the business of airplanes, trains, and helicopters, and two thirds of its revenue came from outside Germany.    So, why would Daimler in Stuttgart go to Chrysler in Detroit? The companies had complementary product lines and Chrysler saw the merger as an opportunity to over come some of the European trade barriers; but the primary reasons for mergers in the auto industry are technology (high fixed costs) and overcapacity. Only those companies with economies of scale can survive. Mr. Park, the President of Hyundai Motor Company stated that the production lines in Korea operate at about 50 percent of capacity in 1998. The auto industry could produce about 1/3 more cars. It has been predicted that only six or seven major carmakers will be able to survive in the next century. This makes merger more of a competitive necessity than a competitive or strategic advantage.

Explanation:

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