Goodbye, Chrysler, no go, Benz, says Daimler - but shareholders do not like it
By Our Corporate Bureau | 04 Oct 2007
Now that the Chrysler part of DaimlerChrysler has been hived off and sold to private equity firm Cerberus Capital Management for $7.4 billion, the Daimler part is faced with the task of renaming the company. Remember, before it acquired Chrysler in 1998 for a grand sum of $36 billion, it used to be called Daimler-Benz. But, more likely than not, there will not be any going back to that name.
An extraordinary shareholders' meeting of the company has been scheduled to take place in Berlin, Germany, on 4 October 2007 to decide on the change of the company's name. The management statement on the subject says, "After the resolution, the company will operate under its new name Daimler AG."
It seems this renaming may not go down well with many Germans, including the company's shareholders, who feel strongly that the name Benz, which was dropped from the company's name in 1989 to accommodate the word Chrysler, should be restored.
The resolution is likely to be passed; but the heartburn may linger for some time. After all, Karl Friedrich Benz was the founder of the German automotive industry. While the other co-founders of the company, Gottlieb Daimler and Wilhelm Maybach, were also around at the time, Benz was the one who patented the processes that made the internal combustion engine feasible for use in cars, and received a patent for his engine in 1879.
The company had hung on to the name Daimler-Benz since 1924, when Karl Benz's Benz & Cie. and Daimler Motoren Gesellschaft, founded by Daimler and Maybach, were merged. Daimler had died in 1900 and Maybach had left in 1907 (he formed his own company, Maybach-Motorenbau, which was later acquired by Daimler-Benz).
In other words, the Benz name has as much claim to the company as the name Daimler. Some shareholders are reported to have put forward a proposal to rename the company Daimler-Benz AG, which is what it was for a long time. Others, upset by what they feel is an excessive and unfair bias in favour of Daimler, want the name to be changed to Benz-Daimler AG, or even to just Benz AG.