COMMENT: Editorial - A new direction for Daimler/Chrysler

The merger of Daimler/Chrysler is a salutary lesson in the perils of spin over substance.

The merger of Daimler/Chrysler is a salutary lesson in the perils of spin over substance.

The merger of Daimler/Chrysler is a salutary lesson in the perils of spin over substance.

As PRWeek went to press, Daimler/Chrysler's stock price was heading swiftly in a southerly direction after the company posted its first loss in almost a decade in its third quarter. Chrysler chief executive James Holden was suddenly replaced by a veteran Daimler executive, Dieter Zetsche, as the German parent tightened its control of the ailing US automaker.

While PR can never influence all the business fundamentals that affect a tight global car market, this merger has been dogged from the start by an appalling campaign of PR misinformation and disingenuousness. It has been over two years since Daimler and Chrysler merged, a union that was deemed a perfect fit at the time, a 'merger of equals' by the chief executive of the merged group, Juergen Schrempp. (See Managing Mergers, page 16)

This soundbite could have come straight out of a PR text book, but it had all the 'equality' of the Nazi 'anschluss.' Time and again, Chrysler executives were passed over for top positions, key executives left in droves, and every conceivable detail of Chrysler's subservient role in the merger - almost down to the relative quality of the paper clips - slipped out through the media.

To no-one's surprise, Schrempp's message has haunted the company ever since. He added injury to insult last month when he told The Financial Times he coined the phrase purely as a bargaining ploy when he negotiated the deal with Chrysler. Who will trust Daimler executives now when their noses have been rubbed in their own humiliation?

The e-mail in-boxes at Chrysler were bulging last month as copies of the article were passed around. But the impact of that invidious piece of spin has seeped through over many, many months to bring about these losses. The fact is that the legendary German efficiency machine has bull-dozered every Chrysler stakeholder in the process, and the communications department was used with the cynical insincerity of a propaganda machine.

The result? Unhappy employees, disappointed investors.

All business is about delivering, as the dot-coms are finally discovering.

And since Daimler had no intention of delivering on Schrempp's catchy but ill-conceived slogan, it needed to find a new one.

Of course, the deal may not have gone through with a more truthful message, but more important than the deal is its success, and that short-termist approach may have potentially flawed the design.

Pulling itself out will depend partly on whether the company can override the effects of the fiercely tough global car market; an environment that might not have been so pointed had the nature of the merger been more accurately communicated to all stakeholders at the start.

But it will depend on more than that. Under the watchful eye of PR chief Tony Cervone, who has returned to Chrysler after a stint at GM, Chrysler is trying to build morale while German executives introduce German measures aimed at making the company more efficient, and the cars more attractive.

But morale can't be built with panzers in the parking lot. Chrysler must go about an exercise in humility, empowerment of Americans and respect for American values and views. Otherwise, it might as well sell up now.

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