DaimlerChrysler is a now defunct German-American automaker that consisted of the merger of Germany's Daimler-Benz AG and the United States-based Chrysler Corporation in 1998, and disbanded in 2007. Daimler-Benz was a profitable, but small, automaker in the early 1990's, flush with profits from their successful Mercedes-Benz automobile line. Jürgen Schrempp, their CEO at the time, set out to expand Daimler-Benz AG into a "Welt AG," a car manufacturer having presence in all parts of the world, making vehicles in every category and price point. Schrempp hoped to create an automotive empire that would compete against juggernauts such as General Motors and Toyota.
First, Schrempp approached his old friend Alex Trotman, then CEO of Ford Motor Company to propose a merger between Daimler-Benz and Ford. While Trotman was interested in exploring the idea further, the Ford family, who controls a majority of Ford stock immediately put a stop to any merger plans, since it would diminish their control of the company. Along with the unsuccessful Mondeo/Contour "World Car" programme, this would be a factor in Trotman's resignation in 1998.
A merger with General Motors would have been impractical for many reasons, namely that a merger with the world's largest automaker would probably not have passed EU and United States antitrust laws, and that Daimler-Benz had a real possibility of being "annexed" into General Motors if such a merger were to occur, perhaps being forced to share technology and platforms with longtime rivals Cadillac or Opel.
The Chrysler Corporation, narrowly escaping from bankruptcy in 1979 under the management of CEO Lee Iacocca was experiencing a renaissance in the early 1990's as an innovative company and a leader in automotive engineering. Under the skillful hand of President Bob Lutz, chief engineer François Castaing and manufacturing president Dennis Pawley, the Chrysler Corporation renewed their image with a line of successful products such as the 1992 Dodge Viper, the Chrysler LH platform vehicles, and the 1994 Dodge Ram. More importantly to Schrempp, they were then the lowest-cost auto manufacturer in the world, a contrast to the rather extravagant Daimler-Benz.