Taken for a Ride by Bill Vlasic

Author:Bill Vlasic
Language: eng
Format: epub
ISBN: 9780061877803
Publisher: HarperCollins

CORDES, HUBBERT, AND ZETSCHE traveled to London the same week for a two-day meeting at the Dorchester Hotel with a team of executives from Ford. The Ford officers had covered the walls of their conference room with charts and related documents, all of which detailed various auto companies and industry data. Cordes was surprised when the Ford executives launched into an intricate presentation of their expectations for global consolidation. This clearly was not an informal meeting to bat around ideas that Daimler and Ford might pursue together. “These guys were obviously a project group,” Cordes said. “They were thinking about scenarios for the world’s auto industry for years to come. There will be consolidation, they said, and we will drive it. At the end of the day, they said, it does not make sense for huge automotive groups like Daimler and Ford to start an alliance to do one new product together. What you would need would be to put the companies together.”

Hubbert was fascinated at how the Ford group had prioritized the ideal partners for various companies. For Ford, the most complementary company was Daimler. “We were number one in their opinion,” Hubbert said. But Hubbert was taken aback when the Ford executives said that from Daimler’s perspective, there might be a better merger partner. “Number one on your list is not Ford,” one of the Ford officers told Hubbert. “Number one on your list might be Chrysler.” Hubbert, Zetsche, and Cordes eyed one another nervously. “We tried to say nothing,” Hubbert said, “and look totally normal.” Eventually, the presentation concluded and the hard points surfaced. Was Ford proposing to buy Daimler? “Yes, that was quite clear,” Hubbert said. “We said there is no way that we can do something that is not a merger of equals. They said they did not think this was possible, but they will go back and ask. In their papers, it was not Daimler-Ford. It was always Ford-Daimler. Ford was always first in line.”

Cordes thought the entire meeting strange. Trotman had not even hinted to Schrempp that Ford wanted to acquire Daimler. Yet Ford’s project team had done a considerable amount of work toward that end. A combination of Ford and Daimler would be formidable, but Daimler would never agree to be bought. The alternative—Daimler’s buying Ford—seemed even move unlikely. “The Ford family was not willing to give up control, and an acquisition of Ford would have been prohibitively expensive,” Cordes said. When the Daimler team returned to Stuttgart, Cordes reported the events to Schrempp.

Schrempp called Trotman.

“What is this?” Schrempp asked. “This is more than just cooperation.”

“It would be a good idea to think of the unthinkable,” Trotman replied. “We should go together.”

“But the structure of your side with one family…” Schrempp said. “We would never be in a number two position.”

Trotman said he was working on the Ford family issue. Could he meet again with Schrempp at some point?

Schrempp agreed to a future meeting, but his expectations were low. He didn’t want to waste time with Ford now.

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