File picture shows DaimlerChrysler CEO Schrempp during a news conference in Stuttgart
Alexandra Winkler  /  Reuters file
Juergen Schrempp, CEO of automaker DaimlerChrysler, said Thursday he plans to leave the world’s fifth largest carmaker at the end of 2005.
updated 7/28/2005 11:38:00 AM ET 2005-07-28T15:38:00

DaimlerChrysler CEO Juergen Schrempp, the architect of the 1998 merger that married Daimler-Benz to Chrysler, will leave the company by the end of the year and turn over the reins to Dieter Zetsche, now head of the U.S.-based Chrysler Group, the company said Thursday.

Zetsche will be replaced as Chrysler head by current No. 2 Thomas LaSorda at the start of 2006.

The news came as the company reported improved second-quarter earnings and a slight rise in sales.

The company also said that Eric Ridenour would take over for LaSorda.

The company that emerged from Schrempp’s 1998 attempt to create a global auto giant has struggled, first with heavy losses at the Chrysler division and now with weak earnings at its former cash cow, Mercedes.

Schrempp has been criticized by some investors because the company’s stock price has lagged since the merger. Comments he made about the deal in a newspaper interview also led to billionaire investor Kirk Kerkorian suing the company over the terms of the deal, a suit Kerkorian lost earlier this year.

Investors’ frustration with Schrempp was indicated by the nearly 10 percent rise in the company’s shares to $47.73 (39.81 euros) in Frankfurt trading after the announcement.

Zetsche has earned plaudits for his turnaround of Chrysler, which has bounced back on the strength of hot-selling new models such as the 300C.

Schrempp has been with DaimlerChrysler for 44 years, and held a variety of management positions, including the leadership of Daimler-Benz operations in South Africa, the United States and in Germany, as well as 17 years as chairman of Daimler-Benz Aerospace and DaimlerChrysler.

He began his career as an apprentice mechanic with Daimler-Benz in 1961 and joined the company’s headquarters in Stuttgart in 1967.

Also Thursday, DaimlerChrysler said its second-quarter earnings came to $884 million (737 million euros), or 88 U.S. cents (73 euro cents) a share, compared with 577 million euros, or 57 euro cents a share, a year earlier. Its operating profit fell 20 percent to 1.67 billion euros from 2.09 billion euros.

Sales during the quarter were up slightly to $46.04 billion (38.4 billion euros) from 37.07 billion euros.

The earnings were helped by a strong performance from the truck and bus unit, which offset narrower profits in its luxury Mercedes Car Group unit.

The Mercedes unit posted a scant operating profit of $14.39 million (12 million euros) for the quarter, a 98 percent drop from 703 million euros in the same quarter last year. Revenue was $14.87 billion (12.4 billion euros), down 4 percent from 12.97 billion euros last year.

The company said the unit sold 308,100 cars, a 4 percent drop from last year that it blamed on few sales by its compact car business Smart. Last year, the unit sold 319,400 cars. In April, DaimlerChrysler announced a $1.44 billion (1.2 billion euro) restructuring of Smart that led to nearly 600 job cuts.

The company’s Chrysler Group, however, showed a 4 percent gain with operating profit rising to $652.26 million (544 million euros) from 521 million euros a year ago. Sales were down 1 percent to $15.62 billion (13.03 billion euros) from 13.2 billion euros.

The number of Chrysler cars sold rose 4 percent to 812,200 from 781,400.

Sales by the company’s commercial vehicles unit, which includes Portland, Ore.-based Freightliner LLC, helped push up that unit’s operating profit 12 percent to $628.28 million (524 million euros) on sales of $12.71 billion (10.6 billion euros), compared with 468 million euros on sales of 8.96 billion euros during the same quarter in 2004.

DaimlerChrysler said the number of trucks, buses and other commercial vehicles sold during the quarter rose 20 percent to 221,600 from 184,900 the year before.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%