Daimler- Chrysler boss quits

FRANKFURT, Germany — DaimlerChrysler CEO Juergen Schrempp, the onetime apprentice mechanic who engineered the controversial marriage of Daimler-Benz to Chrysler, announced Thursday that he will step down at the end of the year.

Dieter Zetsche, who led the resurgence of the U.S.-based Chrysler Group, will take over the world’s fifth-largest automaker, a company Schrempp envisioned after the 1998 merger as a giant that could weather increasingly global competition.

But the colossus stumbled, first at the Chrysler division, then with an ill-fated push into Asia and now at its luxury mainstay Mercedes. As Schrempp announced his resignation, the German-American company reported earnings crimped by troubles at the Mercedes-Benz unit.

Schrempp insisted he was leaving confident in the company’s future.

“All in all I am satisfied with the advances made,” he said. “Clearly DaimlerChrysler is not yet where it wants to be, although I am sure it will arrive. We are heading precisely in the right direction.”

In an upbeat letter to the company’s 385,000 employees, he said DaimlerChrysler’s “tight focus on our global automotive business is now clearly defined … Our results have shown steady improvement, and we are well on the track towards the achievement of targets set during my chairmanship.”

But investors cheered his departure — pushing shares in the company up nearly 9 percent to close at 39.49 euros ($47.78) in Frankfurt. U.S. investors followed suit, as DaimlerChrysler AG shares traded on the New York Stock Exchange rose $4.29, or 9.8 percent, to close at $48.26 Thursday.

Shortly after the 1998 merger with Chrysler Corp., the U.S. half of the company plunged into the red, dragging down the entire company. Another blow was the money it spent acquiring stakes in Mitsubishi Motors Corp. and joint ventures with Hyundai Motor Corp. The investment in Mitsubishi forced a boardroom revolt and DaimlerChrysler eventually pulled out, save for a stake in Fuso, a commercial truck manufacturer.

Billionaire investor Kirk Kerkorian sued the company over the terms of the Chrysler deal after Schrempp suggested it was really a German takeover disguised as a “merger of equals” — a suit Kerkorian eventually lost.

Investors had long been impatient with Schrempp over the company’s stock price. As profits lagged, some shareholders became belligerent, decrying the company’s leadership and singling out the 60-year-old Schrempp for their ire. At this year’s annual meeting, Schrempp was told to resign immediately and several key shareholder groups said they would withhold their ceremonial endorsement of the board and its plans.

Now those investors have their wish. Schrempp will step down Dec. 31, two years before the end of his contract. He doesn’t plan to seek a seat on the company’s supervisory board and won’t receive a salary beyond the end of the year.