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Saturday, Sep. 19, 1998
Chrysler shareholders OK merger
Over 97% favor venture with Daimler-Benz
By BRIAN S. AKRE
Associated PressWILMINGTON, Del. - Chrysler Corp. shareholders Friday strongly endorsed formation of a new international automaker by merging with Daimler-Benz AG of Germany.
Following their lead, Daimler-Benz shareholders, casting votes shortly before a midnight deadline in Stuttgart, Germany, overwhelmingly approved the combination.
Chrysler Chairman Robert J. Eaton told the 150 shareholders gathered at a special meeting that the new DaimlerChrysler AG ``stands a very good chance of becoming the No. 1 transportation company in the world.''
Preliminary results showed 97.5 percent of the voted Chrysler shares were cast in favor of the deal and 2.5 percent were against - a margin of approval that exceeded even Eaton's optimistic expectations.
``It's a very, very strong statement,'' Eaton said after the meeting.
Daimler shareholders held a daylong debate, which focused mainly on the issue of executive pay. Preliminary results showed 99.89 percent of the voted Daimler shares were cast in favor of the deal.
The deal was initially worth $38 billion when it was announced in May, but has slipped to $31 billion as Daimler stock has fallen.
The gathering in the Hotel du Pont's ornate ballroom lasted just over two hours as dozens of shareholders questioned Eaton about the merger. Most of them opposed the deal, in contrast to the lopsided vote.
Several objected in light of Germany's role in World War II.
``You'll always have that on your conscience, Bob. Remember that,'' said corporate gadfly Evelyn Davis of Washington, a Holocaust survivor. Lillian Auspitz of New Jersey predicted that many Jews and Allied veterans would stop buying Chrysler vehicles.
Eaton, whose father-in-law died in the war, said the merger may be ``one small step to bring the world closer together.''
``There's no question horrible atrocities and tragedies happened in World War II,'' he said. ``But that was 53 to 60 years ago. The people involved today clearly don't condone what happened.''
Eaton also noted that Americans will hold an estimated 44 percent of the shares in the new company, compared with 36 percent to 37 percent owned by Germans.
He was less sympathetic when Davis made public recent rumors circulating in Detroit that Eaton has communicated with his old employer, General Motors Corp., about succeeding Chairman Jack Smith at the world's No. 1 automaker. She alleged that Eaton had been ``fishing'' for the job while playing golf with people who know GM's outside directors.
``You would like nothing better than to be the next CEO of General Motors and succeed your old rival, Jack Smith,'' Davis said.
Eaton has said he plans to stay with DaimlerChrysler for three years as co-chairman with Daimler-Benz Chairman Juergen Schrempp, then retire. He called Davis' charge ``absolutely ridiculous.''
``I want to put that whole thing to rest,'' he said. ``I have not talked to anybody, I don't intend to talk to anybody.''
Eaton acknowledged that the pending end of Chrysler as a separate, U.S.-owned company and its last shareholders' meeting made him ``a little sad, a little emotional.'' But he said it would result in a far larger, stronger company when the merger becomes official in mid-November.
``It's a combination of two of the most successful automotive companies in the world'' that will ``create perhaps the world's first truly transnational company. And in that sense, it will change everything.''
Daimler shareholders must exchange enough of their shares for shares in the new company for the deal to be completed. At least 75 percent of Daimler shares must be exchanged by Oct. 23, though that date could be extended 60 more days.
Chrysler and Daimler executives are hoping for a 90 percent exchange rate, however, to use a more favorable accounting method for the merger. Eaton said he remained optimistic that level would be reached.
In Stuttgart, thousands of shareholders attended the Daimler meeting. While most Chrysler shares were voted by mail or the Internet, German law requires shareholders to vote in person.
During the daylong debate, shareholders' key concern was how the merged company would handle the disparity in executive pay between Germany and the United States. Some feared Daimler managers would use the merger to raise their own salaries.
Last year, Eaton took home $16 million in total compensation, compared with about $2 million for Schrempp.
Schrempp evaded the issue under questioning from reporters before the meeting opened.
``The executive pay will be determined by the market,'' he said. ``I am waiting for the new management board to decide on that.''Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web