Organizational development Daimler Chrysler: a failed merger

Résumé du document

When Daimler and Chrysler announced that they would merge, it was seen as the main industrial merger seen since a very long time. This merger was expected to give birth to a new industrial giant which was supposed to become the fifth largest automobile manufacturer worldwide. The merger between Daimler and Chrysler became official in 1998. This merger occurred between two car manufacturers of a similar size on the market. None of them was supposed to take over the other one. The two car manufacturers had almost the same size and similar activities, even if not the same target and strategy. Daimler is a German company, manufacturing cars since 1890. The company has a heavy historical background, which has brought a lot of experience. Daimler is the thirteenth largest car manufacturer worldwide. The company owns other brands like Mercedes Benz, and is involved with other companies too. Chrysler is an American car manufacturer since 1925, and owns two other brands, which are Jeep and Dodge. The strategy of Chrysler has always been Flexibility and Innovation. It means, to be always the first to build a certain type of car. For example recently, Chrysler made the PT Cruiser, Crossfire, and even invented the Van concept in the US. Some former brands owned by Chrysler issued famous cars like the SIMCA or the TALBOT. Innovation and differentiation has always been very important for Chrysler.

Extraits

[...] More than 240 destinations are operated by Air France KLM in around 100 countries . Since the acquisition in 2004, the company is a holding with two subsidies: Air France and KLM. The group is member of Sky Team Alliance, which includes other aircraft companies like: - Alitalia - Delta airlines - Korean Air - Northwest airlines - AeroMexico - Continental airlines - Aeroflot - CSA The activity of the turnover of the group in 2003 is as follows: - 83,1% in passenger transportation - 11,4% in freight transportation (the company was the 4th international freight aircraft worldwide) - for maintenance (second company worldwide) - for other activities, like food service (for airplanes passengers). [...]

[...] In the same way, the net income growth has also increased by around which shows the good health of the company. One indicator for the good health of the company is also the employees growth, which is with around employees. Most of the companies fire people instead of hiring because of high social charges and high labour cost. BP Amoco instead, hired some people, which shows us that the company is in a good health. So investing in the company would have been a good idea for potential investors. [...]

[...] The Group is: The first company worldwide concerning the international passenger transportation since the merger. The second company worldwide for Cargo transportation One of the first worldwide suppliers for services and maintenance in aircrafts. Employing people Making 80% of its turnover with passenger transportation in 2007 years after the merger). Recommendations for the investors On the one hand, it was risky to invest in Air France KLM if you were not already a shareholder as the aircraft area was in real difficulties after 9/11 and the price of petrol made the charges more and more important for airlines and prices increased much faster. [...]

[...] The new group would be worth around $11 billion and employ people. The European Commission will have to decide very shortly whether the acquisition is legal or not. The decision will be made on February 25th 2008. On the other side, the US antitrust authority will also have to validate or cancel the acquisition on January 15th 2008. Recommendation for Investors The future company has a great growth potential as the market share will be 34% and it will centralize most of the worldwide financial information. [...]

[...] All these previsions are quite positive for the investors and shareholders, so I would recommend investing in this company in the future for short and mid term first. And see for long term investment how things are going and if the merger is going well. In 2004, Air France, the French airline company bought KLM, the Dutch airline. The new company took the name of AIR FRANCE KLM and became the first European airline group and one of the most important worldwide. [...]