Backbiting At Daimler
Daimler Benz has been shaken by the publication of a vitriolic attack on the strategies and personality of its former CEO, Edzard Reuter. But the incident probably gives Reuter's successor, Jurgen E. Schrempp, a free hand at the German industrial giant. He is now likely to unshackle the company even faster from Reuter's costly, and largely failed, diversification policy.
Daimler's board forced the author of the attack, former Finance Director Gerhard Liener, to give up a lucrative consulting contract after a German business monthly published extracts of the memo. But it so far has issued no rebuttal of Liener's trashing of Reuter's strategy.
Schrempp must now stanch losses, which could top $2 billion this year--mostly at Daimler Benz Aerospace and Daimler Benz Industrie, formerly AEG, an industrial conglomerate. Both were Reuter-led diversifications. Schrempp will probably continue the breakup of AEG and move thousands of Daimler jobs out of high-cost Germany.
EDITED BY STANLEY REED