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Carroll School of Management

Deiter Zetsche

president & ceo, damilerchrysler corp.

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It's a Jungle out there!

When Dieter Zetsche became president and chief executive of DaimlerChrysler AG's Chrysler group on Nov. 17, 2000, he inherited a company in turmoil, racked by morale problems that came about in what has been called a German takeover of one of America's Big Three auto companies.

Zetsche, who had been with Daimler-Benz AG since 1976, faced challenges on two key fronts: boosting morale and getting new automotive product onto showroom floors.

Now, three years later, Zetsche says morale has improved and the auto supply pipeline from Chrysler will soon be gushing. Zetsche, 50, sat down for an interview before he addressed the Boston College Chief Executives' Club at the Boston Harbor Hotel this week. Here is an edited version of that interview.

Q. The transition when Daimler-Benz AG took over Chrysler Corp. was not squeaky clean. What's been done to improve morale at Chrysler?

A. By setting up a plan and by rallying the folks behind that plan and meeting all the milestones, obviously the morale got much better. The real good thing [now] is that we can base our confidence in the future not just on what we accomplish on the inside, our costs and quality improvements, but we can become confident in the marketplace because of the results of our engineering work, which means based on all the new products coming. There is one more launch this year - the Durango - and then we are having nine new products next year. [The Chrysler Crossfire, the first joint production since the merger, has already been launched.] We checked it and no manufacturer has ever launched so many new models in one year. And it's not just one year off. Actually, within the next 36 months there will be 25 new vehicles.

Q. What are 0 percent interest rates and high incentives on vehicles doing to the industry?

A. It's killing the margins. At the same time, obviously it held up volumes throughout recession, which hasn't happened in the past, so that's certainly the good part of it. But ultimately, as far as we are concerned, of course, we have to stay in the game and we will compete with incentives, but our intention is to have more and more cars and trucks out there which, in the first place, live on their product strength.

Article by Royal Ford
Boston Globe
October 7, 2003