Daimler chief's expansion plans have personal touch

There are not many chief executives, particularly in Germany, who would allow a subordinate to pull them out of a box by their…

There are not many chief executives, particularly in Germany, who would allow a subordinate to pull them out of a box by their moustache in front of hundreds of journalists. But Dieter Zetsche, chief executive of DaimlerChrysler, Germany's biggest car maker, instructed Tom LaSorda, head of Chrysler in the US, to do exactly that this week on stage at the Detroit Motor Show - and revelled in it.

Zetsche's natural showmanship is in stark contrast to the businesslike approach of Jürgen Schrempp, who stepped down as chief executive at the start of the year. Asked about the differences in their approach to management yesterday, Zetsche was coy. "I have less hair," said the balding 52-year-old.

But the real difference between them is in their ambitions for the company. Schrempp spent years building Daimler from a German industrial conglomerate into a global group, buying Chrysler to give it a US presence and a stake in Mitsubishi Motors of Japan. Zetsche, by contrast, wants to take what Daimler already has and make it work better.

Zetsche made clear in Detroit that he was not looking for further acquisitions, at the same time as the group announced that it had sold four million cars for the first time last year, the aim of Schrempp's original takeover binge at the turn of the century.

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The market has already welcomed Zetsche's hands-on approach, exemplified by his turnaround of Chrysler in four years at the helm. On the day Zetsche was appointed last year, the shares jumped 10 per cent, the biggest one-day rise in six years.

"I will not lock myself away," Zetsche said. "I need to sit in cars and trucks, I need to smell the oil in the plants and to meet people. I'm not developing much excitement in being with paperwork."

Now his focus is on Mercedes-Benz, the group's luxury division and cash cow, where he is drawing up plans for productivity improvements. Already, 8,500 job losses are under way at the flagship business, and Zetsche said he "assumes" that Mercedes remains behind both German rival BMW and Toyota's luxury brand Lexus in productivity, a gap he wants to close.

However, Zetsche is acutely aware of the image of Mercedes, consistently rated as the best global motor brand. He said productivity would not be chased at the risk of harming the brand.

Still, when asked how much scope there was to improve Mercedes' manufacturing, he smiled as he replied: "We have opportunities."

The need to protect the brand also underlies his refusal to push cheap components from Chrysler - a mass-market US badge - into Mercedes, a move Zetsche fears would be seized on by rivals.

"I don't have a problem with the statement that there won't be Chrysler parts in a Mercedes," he said. Instead, some components will be jointly developed and used by both, but without the stigma of being from Chrysler.

The focus on Mercedes is helped by his two hats - as well as being group chief executive, Zetsche has kept the job of running the Mercedes Car Group.

This week, he said he could keep both jobs indefinitely. Still, he is keeping a close eye on how his legacy of success is looked after at Chrysler - even if it does involve being dragged along by his facial hair. - (Financial Times service)