GO
Loading...

Daimler AG: Why It Was Very Good To Sell Chrysler

Thursday, 4 Oct 2007 | 10:17 AM ET
Dieter Zetsche, DaimlerChrysler CEO
Dieter Zetsche, DaimlerChrysler CEO

Today in Germany, DaimlerChrysler is officially changing its name to Daimler AG. While this is a formality, this change made me realize just how much the German automaker has benefited from selling Chrysler. Yes, I know what you are gonna say: "They paid $38 Billion for Chrysler and sold it for $7 Billion. Where's the benefit?"

But if you look at this from Daimler's perspective, look at what's happened since the Valentine's Day kiss-off when company execs walked into the Chrysler headquarters in Auburn Hills and told the Americans to find a new dance partner. Daimler shares have gone from $69.78 to $102.54.

This doesn't mean Daimler's days are carefree from here on out. The luxury automaker has to make sure it doesn't lose its focus as it did 5-6 years ago when quality slipped. Company execs like to blame that on the automaker being tied up with Chrysler, though I think that was a convenient excuse. Also, with BMW possibly in the market for a 4th brand and further expansion, Daimler could see further competition.

But for now, all is well in Dieter Zetsche's world. His company is now more centered, it has a stock revving over $100 a share, and there's none of the on-going worries about how to turn around a struggling American automaker.

Questions? Comments? BehindTheWheel@cnbc.com

  Price   Change %Change
DAI
---

Featured

  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

Autos