To follow up on the dependency of shareholder-value to the Daimler concern, we'd like to have a closer look at two of their CEOs, Edzard Reuter and Jürgen Erich Schrempp, who took on this office, exactly in this order, from 1987 onwards or from 1995 to 2005. Thus, the story continues, almost without interruption.
The two of them couldn't have been more different, this is shown by their career histories, although they both ended up at the same place. Reuter had a famous father, Ernst Reuter, who caused quite a stir, not only because of his speech as the Lord Mayor of Berlin ('Schaut auf diese Stadt') (Look at this city). Schrempp, the second of three brothers, was born into middle class circumstances in Freiburg (Breisgau) in 1944.
Reuter was born in 1928 and in 1935, because of the affiliation of his parents to social democracy, emigrated with them to Ankara, Turkey, where his father, in fact, held a well-salaried position as a specialist in the the Economics Ministry. Separated from his siblings, he grew up practically as an only child.
Jürgen Schrempp was not a good scholar, his only interest was in the natural sciences and he hated learning languages. Sometimes he refused point blank to do any work and promptly failed one year at school. Reuter, on the other hand, was given a sort of private tuition by a Turkish women who had been educated in Germany, and despite her lack of teaching material, her standard was probably higher than in the German high schools, he was a good scholar, particularly as far as languages were concerned.
Schrempp left high school with 'Mitteren Reife' (approx. GCSE) and started an apprenticeship at Mercedes. He would be the only CEO, who could take an engine apart and put it together again. Because of the turbulent conditions before and after the end of the Second World War, Reuter would only matriculate in 1947, indeed, then with honours.
While Schrempp, due to his dropping out of school, lived in dispute with his parents, Reuter found the change-over from a his fulfilled youth in Ankara to the totally destroyed Berlin or in fact Germany, difficult. He would later emphasize his relationship to his protective mother and even slightly reproach his father for taking too little part in his life and for giving him too little council.
Schrempp appeared to know exactly what he wanted to do. After his apprenticeship he started studying at the engineer's school in Offenburg, which had in the meantime, become the technical college, from where he graduated as an engineer. His job at Merdedes was kept open for him. Reuter spent more than one year at the universities of Berlin and Göttingen before he finally decided to study law.
At first sight the sporting activities of both men didn't seem very different, Reuter played tennis and Schrempp went mountaineering. Both brought in respectable results, however, Schrempp appeared to be the tougher and perhaps the more ambitious of the two.
After finishing his studies, again with honours, Reuter's problems started again. The president of the Confederation of German Employer's Association (BDA) and the Confederation of German Industries (BDI), Hanns-Martin Schleyer, who was later murdered by the RAF (Red Army Faction), was at that time, the boss of the Berlin Mercedes branch. Due to his linguistic abilities (Turkish, English, French), Schleyer wanted to take him in, this however, was vetoed from above, apparently because of Reuter's affinity to the SPD (Social Democratic Party).
Thus, at the end of the day, Reuter found himself at the, during the Third Reich, very famous UFA film company, which now, after being separated from the head-quarters (DEFA), only just still exists. He made his career there in the legal department and worked his way up to production manager. Indeed, his change-over to being supplier to the newly developing ZDF failed because of the successful efforts of the Bertelsmann-Company.
While Reuter, at 35 years of age, stood before the shards of his former career, Schrempp at this age, had already climbed up the ladder at Mercedes. He had a patron in the person of Karlfried Nordmann, whom he followed up to a certain point, up the career-ladder. After the inevitable intermezzo at the head office in Stuttgart, in 1974, at the age of 30, he took on the, for his development, important foreign post in South Africa.
10 years earlier Reuter had arrived at the point where he would later take on leading positions. Indeed, first of all, the protégé of Hanns Martin Schleyer and the Lord Mayor of Stuttgart, Arnulf Klett, was without a function. He soon wanted to look for a more eventful position, just then, he was given the first orders from his boss, Joachim Zahn, which he apparently, carried out to Zahn's satisfaction.
10 years later, with Schrempp, it was altogether different. In Africa, he found himself in the proverbial 'lions den'. Although Mercedes had to build a substantial amount of their vehicles in this country, this was still being done by the predecessor company, Mercedes Benz of South Africa. In a relatively short time, he rose there from the regional- to the national service manager.
From 1982 to 1984, Jürgen Schrempp had an intermezzo in the USA. There he was to refurbish Euclid, a Daimler subsidiary, which produced heavy utility vehicles etc. This should actually have been a home-game for the truck enthusiast, indeed, in the end nothing came of it. He sold the company, apparently with the approval of his superiors and in 1984, he returned to South Africa.
After two years, Reuter had made himself indispensible to his sometimes difficult boss. Together with him, Reuter rose to the position of Chief Secretary, thus handling the entire correspondence of the executive- and the supervisory boards. Indeed, in this position and not for the first time in his career either, his membership in the SPD gave cause for discussion.
Schrempp was quite different. He 'shone' by having other qualities: His hardness in negotiating and his desire for direct confrontation. Indeed, he would have to forget about this during his second South Africa campaign, because due to his pretty rapid rise to being the boss, the political confrontation also increased.
South Africa was governed by an Apartheid regime, in which Mercedes was selling mainly luxury cars to wealthy white people. The black majority rebelled, demanding their natural rights. A large number of foreign industrial companies had already fled the country. While at home the Daimler-head office was making enormous profits, the South African branch was running at a loss.
While Schrempp, despite the situation, was making a name for himself in South Africa and was eager for a quick change from the disaster in the head-office, Reuter had, years before, learned all about the company. That means, apart from executive- and the supervisory boards, there were also the shareholders, among others Flick, with his authorised representative, Eberhard von Brauchitsch. After the reduction of his share-block, the Deutsche Bank finally became the deciding factor.
Two very different characters. On the one hand, the raw diamond and on the other, the somewhat more sensitive philosopher. Both clearly ambitious, the former with mountaineering, taken up with, among others, Reinhold Messner, the latter more widely active with tennis and horse riding, also not without comparison to the professionals.
Reuter's career at Daimler
Beginning of employment
Management corporate planning
Deputy/regular board member
Financing and business management
Chief Executive Officer (CEO)
Both had met by the way, during Schrempps time in South Africa, apparently they became friends and travelled through the country. It is said, that Reuter treated Schrempp like a son and was also responsible for his successful return to the company head-office. However, at some point the relationship was broken off.
How did this happen? It all started with Reuter's woeful company planning. He wanted to widen the concern's horizons. At the same time, through the new company, the former concern with comprehensive holdings, he saw the chance of putting his boss Breitschwerdt, who was chosen over his head as CEO, out of commission. Already under his guidance, Reuter and Niefer started to invest the enormous Mercedes profits in participation shares.
The first 'victim' was Dornier. Niefer's good contacts here, were of no use, in the end, in the confusion of quarreling heirs, the clever Dornier-Tiefenthaler and their, contract- bound stumbling blocks, they were, to a degree, cheated, inspite of, or perhaps because of the multitude of post-negotiations. AEG and MTU followed suit, so much so that the former automobile-concern could hardly recognise itself anymore.
Now, what about Schrempp? He was installed by Reuter as the new boss of Dasa, because now, the new company needed plenty of management staff. Dasa, this was the often changed magic word for the aero-space company made up of Dornier, MTU and even parts of the re-purchased AEG. In his campaign period, Schrempp also bought and added Focker, apparently for a very good price. In the end, this involvement, like that with AEG, had to be expensively written off.
Certainly, together with Messerschmidt-Bölkow-Blohm, Reuter forged a gigantic industrial complex, which today, with French and Spanish partners and after the aero-space programme, is e.g., participating in the Airbus manufacture. Mercedes contributed a great deal to it, however, in the end there was a large amount of capital that was no longer refinanced. Even worse, SPD member, Reuter, had to accept the accusation that Daimler was participating, not only as before with it's utility vehicle section, but on a large scale and directly, in the production of armaments. 10/12