Thomas Stallkamp, the popular president of DaimlerChrysler AG's U.S. operations, resigned yesterday amid a major management shake-up that sent the automaker's stock price sliding to a record low and essentially completed the German takeover of one of America's oldest car companies.
Stallkamp's departure removes the second-highest-ranking American from the company's management lineup and eliminates the most outspoken defender of the former Chrysler Corp.'s interests in what had been billed "a merger among equals."
DaimlerChrysler co-Chairman Robert Eaton, the company's highest-ranking American and the former chairman of Chrysler Corp., plans to leave DaimlerChrysler early next year, according to several company sources. Several executives said yesterday that they expected an exodus of other American officials in the wake of yesterday's developments.
News of the shake-up stripped $3.93 3/4 from DaimlerChrysler's U.S. stock price, reducing it more than 5 percent, to $66.25. The stock had hit a high of $101.31 1/4 in late April but has been in a downward spiral since it became clear the merger was troubled.
Stallkamp was Eaton's heir apparent. When both men are gone, some U.S. officials said they feared there will be no strong American voice representing employees in DaimlerChrysler's U.S. operations, headquartered in Auburn Hills, Mich. German executives of the company are based across the ocean in Stuttgart.
U.S. officials reached at the Auburn Hills office yesterday said they were despondent and felt betrayed by the company's German leaders. "I guess this is a takeover after all," said one official, who asked not to be identified. He said he was in the process of beefing up his resume.
DaimlerChrysler's supervisory board is scheduled to meet in Frankfurt, Germany, today to formally announce Stallkamp's resignation and to remove three other directors from DaimlerChrysler's 17-member supervisory board. It will be the first major restructuring of company's leadership since the completion of the $40 billion deal last year.
DaimlerChrysler was formed last year through a buyout of Chrysler, America's third-largest car company, by Daimler-Benz AG, Germany's largest industrial power.
But the chief signatories to the deal, then-Daimler-Benz chairman Juergen Schrempp and then-Chrysler chairman Eaton, steadfastly refused to describe the arrangement as a takeover.
Both men held to that position despite numerous German-American squabbles over turf and other post-merger difficulties.
Schrempp also serves as DaimlerChrysler's co-chairman, but he has had a much more active and visible role than Eaton, who has been regarded as a lame duck because he agreed to leave the new company within three years.
These latest events "end the pretense of a merger of equals and ensures that Schrempp is running the show," said Patrick Schmidt, a Canadian management consultant to German and American businesses and author of the book "Understanding American and German Business Cultures."
The irony, according to Schmidt, is that Schrempp and Stallkamp split up because, "Schrempp was more American than German, and Stallkamp was more German than American" in the way they conducted business.
In interviews and other conversations with reporters, Stallkamp frequently has advocated the go-slow approach, saying that quick mergers often lead to quick failures.
Stallkamp also reportedly disagreed with DaimlerChrysler's decision to pour an estimated $1.5 billion into the company's Smart car program--an urban mini-car billed by its advocates as a low-pollution car of the future. The Smart car has been on sale for a year in Europe, but it has not attracted many buyers.
Stallkamp's departure also clears the way for another long-expected DaimlerChrysler move, the elimination of the former Chrysler Corp.'s Plymouth nameplate, which has been part of American automotive history for 72 years.
Both Eaton and former Chrysler chairman Lee A. Iacocca had entertained the idea of dropping Plymouth but backed off in response to opposition from Plymouth dealers. Schrempp has made it clear he has no such loyalty.
The German co-chairman repeatedly has said he will make product decisions based on the performance of those vehicles in the market.
Plymouth has been failing in the long term. There are no new products scheduled in the division's future, and its U.S. sales continue to drop, falling 5 percent to 202,461 vehicles in the first eight months of the year.
CAPTION: Thomas Stallkamp was DaimlerChrysler's most vocal former Chrysler Corp. stalwart.