Daimler's Chief Executive Resigns as NYSE Director

Monday 1:22 am ET By Neal E. Boudette

New York September 29, 2003; Neal E. Boudette writing for Reuters reported that DaimlerChrysler AG Chief Executive Juergen Schrempp has resigned as a director of the New York Stock Exchange, the second member of the board to step down following the resignation of exchange Chairman Dick Grasso.

In a letter faxed to NYSE interim Chairman John Reed on Friday, Mr. Schrempp said it has become increasingly difficult for him to put in the time required as member of the board, a DaimlerChrysler spokesman confirmed.

Many meetings in recent weeks were called on short notice and took place when it was late at night in Germany, the spokesman said. Moreover, board members' duties were likely to increase as Mr. Reed pushes through his plan to reduce the number of members from the current level of 27, he said.

"As a result of the shrinking of the board, the work would be more than he can afford as CEO at DaimlerChrysler," the spokesman said.

NYSE lead director H. Carl McCall handed in his resignation last Thursday. Several others are expected to follow in the next few weeks as Mr. Reed takes over.

Mr. Schrempp, who was the only European member of the NYSE board, has his hands full with his own company. Chrysler, its U.S. arm, is losing money and market share amid a bitter price war with General Motors Corp. and Ford Motor Co., while its flagship Mercedes-Benz unit has been dented by quality problems.

In Asia, affiliate Mitsubishi Motors Corp., has struggled and is still short of turning the corner on profitability.

Mr. Schrempp and other top managers are also facing a potentially difficult legal battle with billionaire investor Kirk Kerkorian. He has accused DaimlerChrysler executives of company of lying about the nature of the 1998 merger that created the German-American car maker. A trial is scheduled to start Dec. 1 in the U.S. District Court in Delaware.

As a result, some institutional investors have begun questioning Mr. Schrempp's strategy of creating a global car maker stretching form Europe to the U.S. to Asia, where he forged an alliance with Japan's Mitsubishi Motors Corp.

Mr. Schrempp's vision has resulted in a "pure destruction of value," said Pia Hellbach, global equities strategist at Union Investments in Frankfurt, which holds a total of 3.7 million DaimlerChrysler shares, according to Thomson Financial/Share Watch. "I see no sign that it's working."

Despite DaimlerChrysler's problems, Mr. Schrempp remains secure in his job, said Ms. Hellbach and other institutional shareholders. "I don't think he's in big trouble," said Trudbert Merkel, equities strategist at Deka Bank in Frankfurt, which owns some 3.6 million shares.