DaimlerChrysler CEO to rename company as Daimler AG

Photo: DaimlerChrysler CEO to rename company as Daimler AG

After having sold the U.S. Chrysler division, DaimlerChrysler AG Chief Executive Dieter Zetsche found it better to change the company's name to Daimler AG, he said to shareholders.

"The name Daimler will immediately make clear that we are a different company than we were before," Zetsche told 4,700 shareholders gathered in Berlin to vote on the name change, a formality expected to pass easily.

"The group name Daimler clearly indicates that we are writing a new chapter in our history, while at the same time continuing our tradition as the inventor of the automobile."

Zetsche said the Stuttgart-based company could not go back to Daimler-Benz AG, its name from 1926 until the turbulent 1998 merger with U.S. Chrysler Corp., because it had added so many new models and divisions since the merger. The truck division has added Mitsubishi Fuso in Asia and Detroit Diesel in the United States, for instance, while the Mercedes Car Group has seven model lines not present nine years ago.

He underscored the company's turn away from the attempt to build a global auto giant by joining with Chrysler in a US$38 billion deal in 1998 under former CEO Juergen Schrempp. The company abandoned the project after struggling with up-and-down results and repeated cost-cutting at the Auburn Hills, Michigan-based Chrysler, and sold 80.1 percent of it to private equity firm Cerberus Capital Management in a Ђ5.5 billion (US$7.81 billion) deal.

"Our earnings will now be more sustainable, as we will no longer be so strongly dependent on the volatile North American volume market," Zetsche said.

That would free the company to focus "on what we do best," he said: luxury cars; commercial vehicles such as trucks, vans and buses, and financial services.

"We are not striving to become the world's largest automotive company. Instead, our aim is to be one of the most admired and respected on a permanent basis."

Zetsche reassured shareholders the company was not forgetting automotive pioneer Karl Benz, whose name would remain in the company's flagship luxury brand, Mercedes-Benz.

Zetsche said the company needed to clearly differentiate its individual product brands from that of the corporate entity, and that surveys showed that Mercedes-Benz was "the most coveted automobile brand in Germany."

The Benz name will get added visibility as the company's Mercedes Car Group, which makes the luxury brand and the Smart compact, is renamed as Mercedes-Benz Cars, he said.

Shareholders had added a motion to change the name to Daimler-Benz, as well as a raft of other proposals including holding more shareholder meetings in Stuttgart as well as Berlin and a special audit of Schrempp's compensation. Management recommended rejection of the proposals and they stood little chance, but the meeting was expected to last all day as shareholders took their chance to address top officials including board chairman Manfred Bischoff.

Hans Richard Schmitz, representing the German DSW shareholder advocacy group, echoed the sour view of the Chrysler merger among many shareholders in Germany, where the mass-market U.S. automaker was consider to have dulled the Mercedes-Benz sheen. "This draws a line under a failed undertaking," he said, expressing the "praise and thanks" of the shareholders to see Chrysler go.

Karl Benz (1844-1929) and Gottlieb Daimler (1834-1900) did pioneering work at the dawn of the automobile age in the 1880s but never met. Benz built a three-wheeled internal combustion vehicle in 1885 and patented it in 1886.

Daimler, working with partner Wilhelm Maybach, built a small internal combustion engine and mounted it on a two-wheeled vehicle in 1885, then installed it on a coach in 1886, according to the Gottlieb Daimler-Karl Benz Foundation, now located in Karl Benz's former mansion in Ladenburg near Heidelberg.

The companies founded by the two men were merged in 1926 to form Daimler-Benz AG.

The German company already changed its share symbol on Frankfurt and New York exchanges in August from DCX to DAI. But renaming will take through spring 2008, including everything from changing 170,000 e-mail addresses to the billboards showing the way to company headquarters in Stuttgart.