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.
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
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
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.