Daimler-Benz to form DaimlerChrysler AG
Chrysler merged in 1998 with Daimler-Benz to form DaimlerChrysler AG. This was initially touted as a merger of equals, but within a couple of years the truth was evident: it was a buyout of Chrysler by Daimler-Benz, with the latter being very much the dominant partner. As if on cue, Chrysler went into another of its financial tailspins soon after the merger, greatly depressing the stock price of the merged firm and causing serious alarm at headquarters in Germany, which sent new CEO, Jürgen Schrempp, to take charge.
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The Plymouth brand was phased out in 2001, and plans for cost-cutting by sharing of platforms and components began. The strongly-Mercedes-influenced Chrysler Crossfire was one of the first results of this program. A return to rear-wheel drive was announced, and in 2004, a new Chrysler 300 using this technology and a new Hemi V8 appeared and became a solid hit. Financial performance began to improve somewhat, with Chrysler now providing a significant share of DaimlerChrysler profits due to restructuring efforts at the Mercedes Car Group. The long-standing partnership with Mitsubishi was dissolved as DaimlerChrysler divested its stake in the firm due to diving Mitsubishi profits and sales worldwide.
On April 7, 2005, a conclusion was announced by U.S. District Judge Joseph Farnnan Jr. presiding over a bench trial in Wilmington, Delaware between Kirk Kerkorian and DaimlerChrysler AG regarding allegations that Jürgen Schrempp of Daimler Benz AG, prior to the 1998 merger, lied and manipulated the Security Exchange Commission and Chrysler Corporation's shareholders (the largest of which was Kirk Kerkorian's Tracinda Corporation) by touting the 1998 merger as a merger of equals, and not an outright acquisition. The judge found in favor of DaimlerChrysler. However, another case (brought by other shareholders, on the same merit as the Kerkorian case) was settled in 2003 for $300 million. The Kerkorian case took over one year to decide.
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