labels: cars, daimlerchrysler, automotive, advertising/branding, management - general
Goodbye, Chrysler, no go, Benz, says Daimler - but shareholders don''t like it news
04 October 2007
Now that the Chrysler part of DaimlerChrysler has been hived off and sold to private equity firm Cerberus Capital Management for $7.4 billion, the Daimler part is faced with the task of renaming the company. Remember, before it acquired Chrysler in 1998 for a grand sum of $36 billion, it used to be called Daimler-Benz. But, more likely than not, there will not be any going back to that name.

An extraordinary shareholders'' meeting of the company has been scheduled to take place in Berlin, Germany, on 4 October 2007 to decide on the change of the company''s name. The management statement on the subject says, "After the resolution, the company will operate under its new name Daimler AG."

It seems this renaming may not go down well with many Germans, including the company''s shareholders, who feel strongly that the name Benz, which was dropped from the company''s name in 1989 to accommodate the word Chrysler, should be restored.

Karl Friedrich Benz
Karl Friedrich Benz

The resolution is likely to be passed; but the heartburn may linger for some time. After all, Karl Friedrich Benz was the founder of the German automotive industry. While the other co-founders of the company, Gottlieb Daimler and Wilhelm Maybach, were also around at the time, Benz was the one who patented the processes that made the internal combustion engine feasible for use in cars, and received a patent for his engine in 1879.

The company had hung on to the name Daimler-Benz since 1924, when Karl Benz''s Benz & Cie. and Daimler Motoren Gesellschaft, founded by Daimler and Maybach, were merged. Daimler had died in 1900 and Maybach had left in 1907 (he formed his own company, Maybach-Motorenbau, which was later acquired by Daimler-Benz).

In other words, the Benz name has as much claim to the company as the name Daimler. Some shareholders are reported to have put forward a proposal to rename the company to Daimler-Benz AG, which is what it was for a long time. Others, upset by what they feel is an excessive and unfair bias in favour of Daimler, want the name to be changed to Benz-Daimler AG, or even to just Benz AG.

When people get down to a fight, they will muster every argument they can in their favour. The arguments being put forward by the Benz loyalists, includes this one, it is said - that the word Benz is shorter, has just one syllable instead of Daimler''s two and is therefore easier to pronounce.

The management has other views: "The proposal by the management to change the name of the corporation takes consideration of requirements concerning the legal aspects of brand names as well as strategic factors. The name Daimler has a high profile and evokes a high degree of confidence in the expertise of the corporation as a globally respected manufacturer of automobiles and commercial vehicles.

"With Daimler, we will also avoid overlaps between the brand of the corporation and the most valuable automobile brand name in the world, Mercedes-Benz. The name Daimler is significantly more open with regard to the positioning of the brand portfolio than ''Mercedes-Benz'' or ''Daimler-Benz'' for example, and therefore is suitable to serve as a corporate name for all our products - not only for Mercedes-Benz but also for Freightliner, Setra, smart, etc. With the proposed name of Daimler, the corporation is continuing its tradition while simultaneously signalling a new start."

That''s one of the points that may be questioned by Benz loyalists. Daimler by itself has not been the company''s name for a long, long time.

One also wonders how shareholders will take to the argument that "The name Daimler is significantly more open with regard to the positioning of the brand portfolio", etc. The fact is that the name Daimler-Benz has been used not only for the automotive business, but also with other businesses, including aerospace.

In 1989, the company''s Deutsche Aerospace AG (DASA) division took over Messerschmitt-Bölkow-Blohm (MBB), and renamed itself Daimler-Benz Aerospace in 1995. In 1998 the division was renamed DaimlerChrysler Aerospace, only to be merged in 2000 with Aerospatiale-Matra of France and Construcciones Aeronáuticas SA (CASA) of Spain to form the European Aeronautic Defence and Space Company (EADS). The former DaimlerChrysler Aerospace now operates as EADS Germany.

The company''s brands now include Mercedes-Benz cars, trucks and components, Maybach and smart cars, and several truck and bus brands, including Freightliner, FUSO, Sterling, Western Star, Setra, Orion and Thomas. The company also owns DaimlerChrysler Financial Services and DaimlerChrysler Bank.

Curiously, a brand named after another co-founder of the company is now being called into question. That is the Maybach, the super-luxury car, which has found takers among some super-rich in India and other Asian countries. Maybach sales have been poor, and industry watchers are questioning the rationale of continuing with this brand.

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Goodbye, Chrysler, no go, Benz, says Daimler - but shareholders don''t like it