Daimler-Benz Attempts to Keep Disgruntled Mercedes-Benz CEO

10/23/96

Reuters reports that Daimler-Benz AG, Germany's biggest industrial group, was trying to persuade Mercedes-Benz chief Helmut Werner to stay on with the luxury carmaker. Earlier reports said that Werner had threatened to resign after a highly publicized dispute over Daimler's plans to reorganize. Reportedly, the chairman of Daimler's management board, Juergen Schrempp, even offered the disgruntled Werner a post as chairman of a restructured Daimler group, to entice him to stay. Werner opposes Schrempp's plan to integrate then highly profitable Mercedes car and truck operation more closely into Daimler's operations.

Werner's contract as management board member of Daimler expires at the end of 1997, and a renewal vote is scheduled to take place during a supervisory board meeting on November 6. Given the possibility of a management revamp, however, the board may delay a decision to extend Werner's contract, which could prompt him to resign. Werner's contract as head of Mercedes runs until 1999.

Schrempp's plan to integrate Mercedes more closely with Daimler is part of an attempt to take Daimler back to its roots as a transport group. The plan would reverse the trend that Schrempp's predecessor Edzard Reuter started when he aimed to create an integrated technology holding group.

Industry analysts have called Schrempp's plan the logical step to follow the dissolution of Daimler's loss-making AEG industrial division and the divestment of the majority-held Fokker planemaker in the Netherlands, all of which took place earlier this year.

Mercedes now earns about three-quarters of Daimler's group revenues, and predicts that its 1996 profits will be "clearly" higher than last year's $1.48 billion profit.

Paul Dever -- The Auto Channel