Mergers are traditionally tallied in dollars, and the sum hit a record last year: corporate couplings totaled $2.5 trillion. But beneath those piles of money are several million people whose lives are often upended when two companies put themselves together. For top executives, mergers can bring incredible riches; for bottom-rung workers toiling in plants or behind counters, changes may be imperceptible. The folks in the middle face the biggest challenges. Midlevel managers are often axed to cut costs after deals; those who remain are taxed to find savings, work through culture clashes and integrate two companies into one. While chairmen Robert Eaton and Jurgen Schrempp make grand plans for the new DaimlerChrysler, it’s up to managers like Buchner and Linder, who perform identical tasks on different sides of the Atlantic, to make the deal work. As the anniversary of their merger nears, NEWSWEEK asked them to reconstruct their first year in the trenches together.
Their stories are surprisingly upbeat–especially amid widespread reports of trouble at their new company. Unlike banking or oil-industry mergers, DaimlerChrysler isn’t laying off workers; this merger is premised on size and complementary geography and product lineups, not head-count reductions. Still, morale in the old Chrysler headquarters appears low as power migrates to Stuttgart. Since the merger a half-dozen senior American executives have quit. “It’s a mixed-up mess,” says one departed exec. Speculation abounds that chairman Eaton, who planned to retire by 2001, may leave in a matter of months.
For Louise Linder there’s another reason to remain calm. After 27 years at Chrysler, she’s a veteran of uncertain times. She started out as a purchasing clerk at a time when women couldn’t move much higher. As gender barriers fell, she earned college and graduate degrees in night school and rose into jobs buying electrical harnesses and spark plugs for cars like the Omni/Horizon. When Chrysler teetered toward bankruptcy in the late ’70s, her job involved calling suppliers to explain why Chrysler couldn’t pay its bills. In the last decade Linder, 49, has prospered: daughter Julie is finishing college, and Louise will celebrate 28 years with her husband, Ron, this June. “Her business trips are longer [since the merger], so I’m a bachelor more often,” says Ron, an insurance agent. “Her hours are longer”–typically 7 a.m. to 7 or 8 p.m.–“so I work longer, too.” But he recognizes the upside. “I look at it as a way for [opportunities] to expand for Louise.”
Buchner shares that rosy view. A former infantry paratrooper in the German Army, Buchner joined Daimler in 1986 as a management trainee. Since then he’s helped set up purchasing for a new plant, been a project manager on the E-Class Mercedes and moved up through purchasing. With the merger upping his workload, he drives the 19 miles to work before 6:30 a.m.; he’s often in the office at night to catch up. Like many DaimlerChrysler families, both the Linders and the Buchners have begun talking about whether their careers may take them across the pond. Ron and Louise are hesitant–his career might suffer–but don’t rule it out; Buchner and his wife, Birgit, are more upbeat about moving abroad. For the right job, Buchner says, “I can imagine living in the U.S.”
In the last year their teams have gotten well acquainted. The process began at a distance. Linder spent the early summer reading up on Daimler and quizzing suppliers who’d been through mergers. In August Buchner’s team traveled to Detroit, where they discussed big-picture issues: how their departments are organized, how they work with suppliers to reduce prices. Until the deal was sealed in November, “the really interesting questions were taboo,” Buchner says. “For example, what does an airbag cost here, what does it cost there?” Since then they’ve begun comparing and brainstorming ways to consolidate and save. Linder and her American colleagues praise their German counterparts’ skill with English (though they try to cut out slang to simplify speech when the Germans are in town). To reciprocate, many Americans are taking German lessons. They can also tick off cultural eccentricities: the Germans eat hamburgers with knives and forks and call their cell phones “handies.” At a Detroit piano bar one night last summer, Linder’s team got its biggest surprise: the Germans know all the lyrics to rock-and-roll oldies.
Back in Stuttgart, the Germans have been experimenting with business-casual dress. They’ve taken classes on cultural awareness (key points: Americans shake hands less and aren’t allowed to compliment women). As they’ve begun meeting with Americans more often, they’re learning to understand their different decision-making style. Americans favor fast-paced trial-and-error experimentation; Germans lay painstaking plans, and implement them precisely. The potential result: “The Americans think the Germans are stubborn militarists, and the Germans think the Americans are totally chaotic,” says Edith Meissner, an executive at the Sindelfingen plant. To foster compromise, Americans are encouraged to make more specific plans, and Germans are urged to begin experimenting more quickly. Both sides surround workers with their sister culture. When DaimlerChrysler stock began trading on Nov. 17, German workers celebrated with American-style cheerleaders, a country-Western band called The Hillbillies, doughnuts and corn on the cob.
To keep anxiety from festering, information is key. When rumors come up, says Sonya Hutchinson, a procurement manager, “we’re able to take them to Louise, and she’ll get information and filter it back to us.” There are also new–and sometimes foreign–bosses to get to know. It’s not always a problem. Buchner says he’s pleased their department is overseen by a top American exec because purchasing wasn’t represented at such a high level before the merger. Says Buchner: “If we start having discussions about whether an American or German should be doing the job, we won’t get anywhere.”
But lately those discussions have become common. “The Germanization has begun,” says one unhappy Detroit-based staffer. Higher-level American executives are said to be upset that Eaton publicly announced his intention to leave, which has limited his power. “We all went crazy” when he announced that decision last May, says a source. In a teleconference last week Eaton and Schrempp defended DaimlerChrysler’s progress. Earnings are up 19 percent, sales are booming and they’re on track to save $1.4 billion in costs this year. “We have 430,000 employees and only nine have left,” Schrempp declared combatively. “What big deal is that?” When asked about speculation that he may pack his bags soon, Eaton said, “Whenever I think that time is right, I’ll move on,” adding that he hasn’t made plans yet. Asked by NEWSWEEK whether he’s a lame duck whose power is evaporating, Eaton replied: “I sure don’t recognize any problem there whatsoever.”
The chairmen and workers like Buchner and Linder share one goal: all hope talk of cultural clashes recedes soon. To Linder, this is the acid test of a successful merger: “When people aren’t talking about the merger anymore… When they say ‘Remember when it was Daimler and Chrysler?’ " Until that time, there’s work to be done. This week she’s off to Stuttgart for the fourth time, where she and Buchner will meet with suppliers. They have parts lists to compare, appointments to keep. And synergies to find before they sleep.
Making the Most of your Merger: An Employee’s Guide You’re not alone–merger mania has many people anxious about their futures. How to avoid joining the 74,000 axed in merger-related job cuts last year?
