In the mid 90’s, Chrysler Corporation, American brand, was one of the most profitable vehicles producer in the world. The company had taken risks in producing innovating and ambitious automobiles and had seen its market shares increasing in USA of about 23 % in 1997 while imports were dominated the automotive market during this period.
On the other hand, Daimler-Benz AG didn’t succeed to really penetrate the American market despite its labor intensive method of production and a growing American economy. It also recognized that it won’t succeed alone. Chrysler appeared to be the automotive producer to merger with in terms of annual profits, low design costs and American network.
Both Chrysler Corporation and Daimler-Benz were positioned as leaders on their respective markets. Indeed they both suggested successful products and got skilled workforces on different countries in the world. In merging, each company would benefit from the strengths of the other and would reach a strategic position on the global market.

1) What went wrong?

2) What type of synergy was expected and why they failed to create it?

With more than 440 000 employees in the world and a market capitalization approach of 100 billion dollars, Chrysler & Daimler hoped to reach a dominant place on the automotive sector and also became one of the leaders in the world.
Chrysler & Daimler would never even imagine that a problem of culture would arise within the company as the integration team organized different cultural workshops for the employees of the entire group on subjects such as “how to behave in Germany” or “the difference way of doing business in both countries” and so on… However the problem was not based on these cultural aspects in the company. The problem came from different brands image of the two companies. Indeed Daimler-Mercedes-Benz was perceived as special and luxurious brand whereas Chrysler was considered as a poorer brand. In addition to that, the tensions