Article excerpt

The birth of yet another giant

The name doesn't exactly roll off the tongue like a Mercedes off a German assembly line, but we had better get used to saying it.

DaimlerChrysler. With a mere five-months gestation, the largest industrial merger in history emerged this week, joining a growing list of mind-shattering unions by international conglomerates. Perhaps reflecting the tenor of the times, Daimler-Benz's $37 million purchase of Chrysler Corp. produced barely a hint of complaint. The deal must undergo scrutiny by antitrust lawyers, but so far, no one has found reason to suggest that review will be anything more than a formality.

Indeed, the experts say that - as in banking, entertainment, finance, cable television and practically everything else - this is just the beginning of a new evolutionary cycle in the life of the automobile industry. Whereas some 3,000 separate companies once made automobiles around the world, fewer than 20 do today. One expert foresees a world with only three major car makers and a mere handful of secondary producers. Can it be that we have seen so much successful commingling of giants in recent years that the thought no longer conjures images of profiteering monopolies with no regard for the customers they feed on?

It would certainly appear so. In fact, these mergers often seem to stem almost directly from the need to satisfy customer needs. By joining Chrysler, Daimler-Benz hopes to cut its costs by $1.4 billion annually, tie into an experienced marketing machine and, ultimately, sell its cars for less. Chrysler benefits through association with one of the world's premier auto makers, and both companies stand poised to present their products faster in rapidly growing international markets.

This union also provides a certain unique institutional memory of what can happen when car companies - or any businesses - forget their constituencies. But for the full faith and credit of the United States government, Chrysler would have fallen victim in 1980 to the Big Three arrogance that contributed to a historic slump in the American auto industry in the late 1970s and early 1980s. …