Beleaguered car company DaimlerChrysler, has poached Ford’s global head of marketing to help stem its poor performance.
The survival of DaimlerChrysler in its current form depends on the success of an overhaul of its loss-making US Chrysler division. The Chrysler division expects an operating loss of between E2.2bn (£1.38bn) and E2.6bn (£1.64bn) in 2001. The overhaul programme anticipates a return to profitability for the Chrysler Group in 2002.
In order to meet this deadline, DaimlerChrysler’s much-maligned chief JÃÂ¼rgen Schrempp, is going to have to pull more than a few rabbits out of his hat.
Schrempp has lured Jim Schroer, vice-president of global marketing for the Ford Motor Company, and George Murphy, general marketing manager for the Ford Division, to Chrysler (MW February 22).
Murphy has taken on the role of senior vice-president of global brand marketing. He reports to Schroer, who has been made executive vice-president for sales and marketing at the Chrysler Group.
Anyone who knows and works with Schroer says his loss will be a blow to Ford boss Jacques Nasser, with whom he has worked closely since he joined the company in 1996.
Nasser brought him in as Ford’s most senior marketer but, unusually for the car industry, Schroer did not have an automotive background, having joined from RJR Nabisco where he was vice-president of sales and marketing.
At Ford, Schroer was responsible for the development of the Ford Motor Company’s brands: Ford, Lincoln, Volvo, Aston Martin, Mercury, Mazda, Land Rover and Jaguar.
An industry insider says: “What he brought to Ford was brand perspective and he very cleverly aligned himself with the corporate strengths of the company.”
Schroer made sure each of Ford’s primary brands was given a distinct identity, understood by everyone that worked on the marques.
Nasser also called upon Schroer’s services after becoming concerned that Ford shares were stagnant, despite the fact that industry commentators considered that he had not put a foot wrong as president and chief executive.
Schroer commissioned the Ford Motor Company’s first corporate ad campaign. Starring child prodigy Charlotte Church, the campaign identified Ford as the umbrella brand for all the seven other marques under its ownership. At the time it was generally accepted that the ad was aimed at analysts in Europe and Wall Street and not consumers.
Chrysler’s operating profits for the year ending 2000 fell by 90 per cent to E500m (£315m) as a result of losses incurred in the second half of the year. These figures included a E1.4bn (£883m) operating loss in the fourth quarter of 2000. The poor performance of Chrysler dragged the parent company DaimlerChrysler into the red for the last quarter, with a loss of $267m (£183m).
It is all a far cry from when the merger between German-based Daimler-Benz and Chrysler was announced in 1998 as a “marriage made in heaven”. Industry observers say it was anything but a merger, more of a takeover and that Schrempp was ignorant of the ominous picture developing at Chrysler.
In November, once the troubles hit home, Schroer’s predecessor Ted Cunningham was forced out, shortly after a global agency review which saw all of Chrysler’s business move into BDDO, and ended FCB’s relationship with the car company.
Various executives were then flown in from Mercedes to oversee Chrysler, including Dieter Zetsche, who has been made chief executive. So far there has been no apparent reversal in the US division’s fortunes and the “Germanisation” of management has only served to antagonise some of Chrysler’s original shareholders, who are seeking damages for what they claim was a “non-premium” and benefit-free takeover of Chrysler.
Schrempp has also outlined plans to close plants and end some of DaimlerChrysler’s supply contracts.
Zetsche says Schroer is “essential” to helping the company implement its revival plan. He adds: “Obviously there are quite a lot of people who believe in our future. We are not going for average, we are going for big targets.”
Part of this “big” strategy is likely to rely on Chrysler defining its brands in a similar way to Ford.
“Schroer can help them nail the Chrysler brand,” says an industry insider. “What does the parent brand Chrysler stand for? And what do the individual brands stand for? At the moment it is not clear.”
Schroer will have a smaller number of brands to work on at Chrysler than in his previous role at Ford. Schroer’s first task is to create clear brand identities for Jeep, Dodge and Chrysler marques. Insiders say that if he is successful, he could be given Mercedes as well.
Schroer is a much-respected marketer, whose loss will be lamented by Nasser at Ford, who tried hard to keep him. Insiders claim that Schroer was only finally persuaded to take the post at DaimlerChrysler after he was offered twice his salary of $1m (£688,000) and greater freedom than at Ford.
Schrempp has learned that he can not send in the “German storm troopers” to fix Chrysler Group’s problems. Chrysler is an American company, and although its cars are sold outside the US, its biggest market is by far the US. American management, who understand US culture will need to play a key role in reversing Chrysler’s fortunes.