Bureaucratic dictators manipulate empire

["Charles Brown" <CharlesB@xxxxxxxxxxxxxxxxxxxxx>]

http://www.freep.com/


 DaimlerChrysler installs American at Hyundai, tightens grip on global empire

Wednesday, December 06, 2000

BY HANS GREIMEL


FRANKFURT, Germany -- DaimlerChrysler AG tightened the reins on its far-flung auto empire Wednesday, installing a Chrysler executive on the management board of Hyundai Motor Co. and announcing a shake-out at its small network of Chrysler dealerships in Germany.

Thomas Sidlik, a 51-year-old Chrysler Corp. veteran from before its 1998 merger with Daimler-Benz, will be the first American on the board of the South Korean company.

DaimlerChrysler, the world's fifth-largest automaker, has increasingly installed executives at its foreign partners to keep control of a business footprint stretching from China to Brazil.

This year, the Stuttgart-based firm built on the Chrysler takeover with the purchase of a 10 percent stake in Hyundai, which makes three of every four vehicles sold in South Korea, and a 34 percent stake in debt-ridden Mitsubishi Motors of Japan.

"I think it's a very positive message to shareholders that we will have an impact on operational decisions" at Hyundai, said DaimlerChrysler spokesman Michael Pfister. "It shows the level of good relations between Hyundai and DaimlerChrysler."

The news helped push DaimlerChrysler shares up 1.53 percent to 49.23 euros in midday Frankfurt trading.

Sidlick's appointment to Hyundai follows last month's shake-up at the company's U.S.-based Chrysler division, when DaimlerChrysler Chairman Juergen Schrempp ousted Chrysler president Jim Holden for failing to give headquarters better warning about upcoming losses.

Schrempp replaced him with a team of Germans led by experienced cost-cutter Dieter Zetsche, who is expected to improve trans-Atlantic communication and give Stuttgart better eyes and ears in the United States.

Schrempp pulled a similar move at Mitsubishi, dispatching Rolf Eckrodt, now head of DaimlerChrysler's rail-equipment unit Adtranz, to become the Japanese automaker's chief operating officer in January.

At Hyundai, Sidlik is expected to help execute a number of projects, including a 50-50 joint venture on commercial trucks and talks on helping build a four-seat version of DaimlerChrysler's micro-mini Smart car.

Pfister could not say when Sidlik will take up his new duties, though he added that the truck deal is expected to be hammered out by New Year's.

Sidlik, the DaimlerChrysler management board member in charge of purchasing and supply, will continue to work from his Michigan office.

Separately, DaimlerChrysler confirmed a reorganization plan that could close as many as a third of its 240 Chrysler dealerships in Germany.

In an interview with business daily Handelsblatt, DaimlerChrysler sales chief Eckhard Panka said many of the country's Chrysler dealerships are too small and inefficient to stay open.

Under the new plan, dealerships must re-negotiate contracts to sell cars by April 2001, a process that will streamline distribution and possibly force the closure of several outlets, Panka said.

The shake-up also will open the doors for Mercedes dealers to own Chrysler lots as well, although prohibit them from selling both brands under the same roof.

Chrysler has sold 22,000 vehicles this year -- or only 100 per dealership, Panka said, adding that company-owned Mercedes dealerships aim to turn over 1,400 vehicles in that timeframe.

Mercedes has about 1,200 dealerships in Germany.