Mercedes 1999 Annual Report Download - page 9

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CHAIRMEN’S LETTER
3
Robert J. Eaton, Jürgen E. Schrempp
For that, we owe a great deal to our people all around the
world, who can be proud of a fine achievement in a difficult
year. Working together has been more demanding than we
anticipated. Integration projects made heavy calls on our
time and energies. But we got on with our day-to-day busi-
ness, kept our eye on the ball, and simultaneously set in
motion a process of profound change. It is to everyone’s
credit that we accomplished so much – the best year ever
in our combined history.
PILLARS OF PROFITABILITY
In particular, we accomplished four points in your company
this year – each one will support our long-term profitable
growth. We completed our integration, set up two councils
to fast-track our best ideas, unlocked new value for share-
holders in our non-automotive businesses, and put in place
a strategy for our future growth.
Let’s look at each of those accomplishments in a little more
detail.
First, we completed our program for the integration of the
new company in just one year, instead of two as originally
projected. The effect of the integration process: We are now
one company.
Today, integrated functional departments, and shared ideas
and technologies, are significantly improving everything we
make, the way we do business, and the way we serve our
customers – as this report shows.
And as importantly, these integration benefits are helping
us to become more efficient. In 1999 we made €1.4
(US $1.4) billion in synergies.
Secondly, we restructured our organization by establishing
three brand-focused automotive divisions, backed by an
Automotive Council for product design, engineering and
production, and a Sales and Marketing Council for brand
development and strengthening our sales organization, both
of which report directly to the Board of Management. The
councils will preserve the most successful aspects of our
integration and sustain a process of continuous transfor-
mation and reinvention at DaimlerChrysler – principally by
fast-tracking good ideas.
Thirdly, we restructured our business portfolio as part of
our on-going strategy to unlock value for our shareholders
from our non-automotive businesses. To this end, we created
the world’s third largest aerospace group (after Boeing
and Lockheed) by negotiating the three-way merger of
DaimlerChrysler Aerospace, Aerospatiale-Matra and CASA,
to form the European Aeronautic Defence and Space Com-
pany, EADS. This deal leaves us with 30% of EADS
– the largest single shareholding.