Sunday, April 10, 2005
Everyone loses in billionaire's legal battle against DaimlerChrysler
By Daniel Howes / The Detroit News


In the end, we know this about DaimlerChrysler AG's legal crackup with billionaire Kirk Kerkorian -- they were both wrong.

Not in the legal sense, per se, because U.S. District Judge Joseph Farnan issued a clear, unequivocal and delicious smackdown to Kerkorian's claim that DaimlerChrysler Chairman Juergen Schrempp defrauded him of a takeover premium potentially worth hundreds of millions more to the mogul.

Please.

They were both wrong in that these titans of business, masters of the universe accustomed to commanding all they survey, allowed their towering egos to lure them into indefensible positions, saddling both of their companies with mountainous legal fees.

The only real difference is that Kerkorian's "I was duped" complaint was far more indefensible than Schrempp's bragging to the Financial Times. He claimed he always intended to make Chrysler Corp. a division of the combined company but engineered the 1998 takeover in a "roundabout" way for essentially political reasons.

What he should have said in that November 2000 interview is nothing because the reality of what the Germans called die Uebernahme (the takeover) spoke for itself -- a German CEO, a German CFO, a German corporate structure, fewer American shareholders and the steady decline of Americans in top management.

But the architect of the most audacious deal corporate Germany had ever seen couldn't abide speculation, following Chrysler's first quarterly loss in a decade, that it was Chrysler Chairman Robert Eaton who'd sold him an automaker near collapse (which it was and which he had).

In the end, the Schrempp-Kerkorian clash was little more than two heavyweights bumping bellies in the vain hope of overshadowing their screwups. It didn't work.

That anyone even took Kerkorian's complaints seriously and thought he might prevail is perhaps the most remarkable aspect to this long and wasteful case.

He and his aide-de-camp inside Chrysler's board of directors, James Aljian, were "enthusiastic" about the merger, according to court papers. Kerkorian expressed support for the deal before brooking any discussions of corporate governance.

Aljian and Chrysler's directors met seven times in May 1998 to discuss the deal, and in none of Aljian's seven postmerger memos to his boss did he ever mention the management structure of the combined company.

Only after Schrempp figuratively pounded his chest in the peach pages of the FT did Kerkorian pounce -- not because Schrempp duped him (that, in hindsight, looks more like a pretext), but because the combined company was foundering and so was Kerkorian's stake in it.

In some very meaningful ways, DaimlerChrysler still is. Only now it's not the Americans in Auburn Hills that are weighing on the corporate balance sheet; it's the Germans at Mercedes-Benz in Stuttgart.

Their earnings are headed south, and the three-pointed star's vaunted quality reputation has been seriously dented -- just like the credibility of Kerkorian and Schrempp, whose tenure carries yet another stain that could have been avoided easily.

detnews.com

redriderbob

 

Times are changing. DCX stockholders bit the bullet on this one. GM is sliding down the tubes and Ford's stock fell 5% today alone.

Meanwhile, people are paying $2,000 over sticker prices for USED "green cars" like the one Toyota makes.....

 

People buying those green cars are sending our dollars overseas, causing the dollar to plummet with our wages and standard of living. As more of us lose our jobs, the cost of getting to work becomes less important. If the Germans see what happened to Chrysler as a takeover, why do Americans continue to try kidding themselves abvout a "merger?"

 

Not everyone lost. The lawyer thieves made out again. Can you imagine how much more productive our economy/society would be if we lined up all the liar lawyers and shot them? We can even save bullets. I volunteer to bludgeon them all to death .... PLEASE!!!!!!