Activist: Fire DaimlerChrysler Chief

Activist: Fire DaimlerChrysler Chief; dump loss-making U.S. Chrysler division
The Associated Press, Nov 30 2000

FRANKFURT, Germany (AP) - A prominent shareholder activist plans to petition DaimlerChrysler AG to fire its chief executive Juergen Schrempp and dump its loss-making U.S. Chrysler division.

Ekkehard Wenger, who leads a German shareholder advocacy group, said Thursday he will also push for the dismissal of supervisory board chairman Hilmar Kopper in formal proposals to be submitted during DaimlerChrysler's annual shareholder meeting next April.

Wenger's announcement comes on the heels of lawsuits that accuse the Stuttgart-based company of defrauding shareholders by depicting the 1998 merger between Daimler-Benz AG and Chrysler Corp. as a merger of equals instead of a full-scale German takeover. That includes an $8 billion lawsuit filed by U.S. investor Kirk Kerkorian, DaimlerChrysler's third biggest shareholder.

Wenger blamed German mismanagement for the dramatic slide in the company's share price, which has fallen to nearly half its post-merger high. Schrempp and the supervisory board did little to rein in Chrysler, which posted a $512 million loss in the third quarter, before it was too late, he said.

``The biggest mistake was simply to arrange the merger in the first place,'' Wenger said. ``After that, Schrempp should have kept closer control on the American unit and replaced more managers sooner.''

Schrempp this month fired Chrysler president James Holden and replaced him with a German team lead by Dieter Zetsche. Despite that, the share price has continued to lose ground, dropping 1.18 percent to 45.26 euros ($38.92) in Frankfurt trading Thursday.

Wenger, an outspoken critic of the merger and a persistent DaimlerChrysler watchdog, targeted Kopper for allegedly not keeping a closer eye on Schrempp.

``Kopper's been in control for 11 years, and he's never done a thing to correct the mistakes of the management board in the past with Mr. Reuter, and now it's the same with Schrempp,'' Wenger said.

Schrempp replaced Edzard Reuter as chief executive in 1995 after Reuter was blamed for racking up a $1.27 billion loss in 1993. At the time, Schrempp was boss of one of Daimler's worst-performing units, Daimler-Benz Aerospace.

Analysts have discounted attempts to dump DaimlerChrysler's management, saying Schrempp's grip on power is tight and that he still has time to turn around Chrysler before losing support from other board members.