I Have The Kit DaimlerChrysler Gave Employees In 1998 To Introduce The Biggest Merger In Industrial History. Here’s What’s Inside

I truly believe that not enough is being done to preserve automotive history. Yes, there are great vehicle collections out there, but there aren’t nearly enough museums about car culture itself, filled not just with vehicles, but with amazing documents and sketches and prototype parts and on and on. I say this because a reader picked up an incredible piece of automotive history cheaply enough that he sent it to me for free. And I’m just blown away.

I don’t want to downplay how great some car museums are — The Petersen, the Mercedes-Benz Museum, The Lane, and on and on — but you’ll never convince me that car culture is being properly preserved in 2024. Not when some of the greatest automotive artifacts are just hiding away in a vault in Detroit; not when one of the greatest brands in the world doesn’t even have a museum (my friend has original Willys-Overland engineering drawings that had been thrown in the trash when Chrysler left the Jeep-Truck building on Plymouth Road in Detroit!!); not when one of the finest museums in the world shuts down after 15 years (with the artifacts later being sold at auction); and certainly not when amazing relics of car culture are being found in swap meets for dirt cheap, and then being sent to little ol’ me.

Remember that article from January about the amazing original designs of the ZJ Grand Cherokee — an extremely popular car, and one whose history is not in any way being preserved since there’s no Jeep museum? This one:

I’ve stumbled upon amazing relics of auto history many times, and I’m always amazed that it’s out there and so cheap. And perhaps more importantly: I’m amazed that so few people seem to care about it. Meanwhile, I’m over here freaking out and calling things holy grails. Maybe I’m in a little too deep? Or maybe there is a real problem with car culture preservation.

In any case, that brings me to today’s main subject: This incredible DaimlerChrysler welcome kit:

 

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Yes, you’re seeing that right. This is the original welcome kit sent to Chrysler employees back in the summer of 1998, when the ink dried on the infamous Daimler-Chrysler merger. Called the “Merger of Equals,” it was a partnership marked by huge insurmountable cultural clashes; by initiatives like Material Cost Management (MCM), which involved Chrysler pulling cost from areas it shouldn’t have, like interiors (which became awful); by Chrysler feeling like it was being wrung dry by Ze Germans (as the famous joke goes: How do you pronounce DaimlerChrysler? The “Chrysler” is silent); and on and on.

It was a failure, even if not a complete and utter one, since Chrysler did milk its LX (Charger, 300) and WK2/WD (Jeep Grand Cherokee, Dodge Durango) platforms, and used Daimler-sourced transmission in damn near everything for many years. As for what Daimler ended up getting out of it? Well, it lost billions of dollars and gained, well, not a whole lot. Here’s how the Harvard Business Review describes what went down:

In theory, the Daimler-Chrysler combination should have yielded two very potent sources of competitive advantage. The first was a cohesive global brand architecture. Consider Toyota. Its brand structure is extremely clear and logical: Lexus for the high-end buyer, Toyota for the middle-income family, and Scion for the hip young. The segmentation makes sense and the progressions between segments are natural ones. Young people find partners, have children, and buy minivans; people with money move up to luxury vehicles.

The second potential source of competitive advantage lay in creating a coherent platform strategy built on the economic logic of parts sharing. Because the cost of developing new vehicles is so great, car companies design “platforms” from which they create families of vehicles. They also try to share parts between platforms to drive economies of scale in manufacturing. See two papers on the history of the US and European automobile industries and platform strategy — 1, 2 — that I wrote with Nathan Simon.

Realizing synergy in brand architecture and platform strategy would have required deep integration of Daimler and Chrysler. German engineers would have had to design cars using parts created by American engineers and vice versa. The management team would have had to develop a global brand strategy and associated logic of competitive positioning. None of this happened. They ran the two organizations as separate operations. When major shifts in the environment (rising gas prices and the move away from SUVs and trucks) kicked out the blocks from under Chrysler’s recovery, it was both necessary and possible for them to part.a

That article also refers to Chrysler as “mid-market cowboys of Detroit” and the Germans as “high-end knights of Stuttgart.” Whether that’s how the Germans viewed the Americans, I’m unsure, but as a German-American citizen, I’d say the answer is: probably.

In any case, it seems like every company was keen to merge back in the 1990s to realize synergies and optimize processes — “merger-mania” as the Harvard Business Review puts it. And this time, like many others, it ended pretty poorly for everyone, with Daimler wasting money and Chrysler being sold off to private equity firm Cerberus.

Anyway, that’s a bit of the context behind this welcome kit — as you can see, back in 1998, the merger seemed so promising and exciting! Just look at how palpable the optimism is in this welcome kit. There’s a Swatch gift inside (in the 1990s, Swatch and Daimler were also in a joint venture, with the Smart car being the byproduct):

Here’s the gift note, stating that the Swatch represents that “this merger is ‘the right step at the right time,’ and that we intend for DaimlerChrysler to be a ‘transparent’ company.” Plus, the note says, “we fully expect that fun will indeed be one of the byproducts of all our hard work to make DaimlerChrysler the most extraordinary company in the world!”

So much optimism!

Under that gift note is a letter from CEOs of both companies — Juergen Schrempp and Robert Eaton:

The whole letter is just pure blind optimism about how the CEOs want DaimlerChrysler to be “the greatest company in the world” and “extraordinary in everything we do, everywhere we do it, all the time.”

Behind that letter is a “Day One Magazine for Employees.” On the cover are some headlines: “The First Day of DaimlerChrysler,” “An Overview of the New Comapany,” and “The Birth of a Big Idea.”

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On the first page is a letter from both CEOs to employees. “These are historic times as we embark on a new future together. With the merger between Daimler-Benz and Chrysler now complete, we have an opportunity to break existing paradigms and move into a new dimension,” the letter begins. It goes on to say that “both companies are in excellent shape and are strong enoguh to continue to grow on their own. Why, then, merge? Because together we can grow faster and more efficiently both in our traditional markets and in mergeing markets, where we will take advantage of new opportunities as DaimlerChrysler.”

“Our goal is clear: to create the world’s leading automotive, transportation and services company for the 21st century — with your experience, your commitment and your effort. But most of all with your ideas that will enable us to outpace our competitors.”

Next we have a page with quotes from employees in Germany and in the U.S. The quotes basically offer the employee’s thoughts on how this could turn out to be a great merger:

Next is an article describing the thought process behind the merger. “The Right Idea At The Right Time” is the headline, with the lede going: “Changes in the world economic landscape, particularly the globalization of markets, are constantly creating new challenges for international companies such as Daimler-Benz and Chrysler.”

It continues: “This is fueling already intense corporate pressure. Companies have to improve their efficiencies bt sharpening their cost structures and developing new products quicker. Pressure is mounting on the manufacturers to combine so they could provide better value and return to shareholders by reducing costs, maximizing opportunities in research and development, and sharing the cost and risk of developing new products for emerging markets.”

On paper, it seemed like a great idea. “Independently of each other, both companies carried out strategic reviews and came to the same conclusion: they were the ideal partners.”

“On the automotive side, their product ranges are complementary. In regional terms too, the companies complement each other perfectly. Chrysler is strong in North America. Daimler-Benz is particularly strong in Europe.”

Next is a bit of an intro to Daimler-Benz and its cars, as well as an intro to Chrysler and its brands and vehicles:

Here’s a leadership org chart showing the new company’s incredible diversity:

From there, the welcome kit shows the facilities under the DaimlerChrysler umbrella:

Here’s the story on how the “biggest merger in industrial history” came about in only a short 10 months:

Here’s some info on share prices:

Here’s a bit of history on both companies:

From there, the “Day One Magazine for Employees” highlights a bunch of employees at each company:

Here’s the story of how the two companies launched the ad campaign to launch the new company, DaimlerChrysler:

The article even features Ralph Gilles!:

Here’s some then-recent news from each company:

And here’s the story of how the two companies built a single web platform for all employees of the new company:

The welcome kit also included this awesome poster of the cars Daimler and Chrysler built at the time:

It’s just an amazing piece of car history, and I’m so humbled that reader Gareth sent it my way. I’ll cherish it, and make sure it stays in wonderful shape, though I may wear that Swatch watch to automotive gatherings like Pebble Beach next month.