Defiant Daimler

With the company struggling, Schrempp's expansion strategy is under attack. Can he make investors swallow his moves downmarket?

Jurgen E. Schrempp is exasperated. The athletic CEO of DaimlerChrysler is a risk-taker who always trusts his instincts--in the African bush or in the boardroom. To him, the need for bold moves is so evident that it's annoying when investors question his strategy. So when asked by reporters why he didn't stick to the high-margin luxury segment Daimler knows best--powerful Mercedes-Benz cars--he springs out of his chair to explain. On a blackboard, he draws a big rectangle that represents the luxury-car market and then begins: "Let's say you only made Mercedes S- or E-Class cars with very high margins. And there you would live peacefully forever because no one would attack you? What nonsense! Everyone's moving into that segment. Everyone." That, he explains, is why he bought Chrysler: to outflank his rivals before they outflanked him.

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