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DaimlerChrysler CEO defends company name change to shareholders

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DaimlerChrysler AG chief executive Dieter Zetsche reassured shareholders Thursday that the automaker was not forgetting its history with a proposed name change to Daimler AG _ instead of Daimler-Benz, the company's name for much of the 20th century.

The Benz name would remain in the company's flagship luxury brand, Mercedes-Benz, and get plenty of attention, Zetsche told 4,700 shareholders at a Berlin conference centre before a vote on dropping Chrysler from the name, a formality after selling a majority stake in the U.S. automaker earlier this year.

Zetsche said the company needed to clearly differentiate its individual product brands from that of the corporate entity, and that surveys showed that Mercedes-Benz was ``the most coveted automobile brand in Germany.''

``Rest assured we will treat both it and our other brands with the greatest respect,'' Zetsche said. ``And that's why we want to clearly distinguish between our group brand on the one hand and our product brands on the other.''

The Benz name will get added visibility as the company's Mercedes Car Group, which makes the luxury brand and the Smart compact, is renamed as Mercedes-Benz Cars, he said.

Shareholder Bernd Gans of Vaterstetten, Germany, argued that returning to the original name would right a wrong _ and added a motion to that effect to the agenda.

``Replacing the traditional name of Benz with the name of the U.S. corporation, which at that time was already sufficiently well-known as a crisis company, was always regarded as arbitrary and in bad style,'' he wrote.

Shareholder activists added a raft of other items to the agenda, ranging from proposals to hold shareholder meetings in Stuttgart as well as Berlin and an audit of expenses for the name change. Company management recommended rejection of them all and they had little chance of passing.

As the shareholders met, the company said its Mercedes Car Group, made up of the Mercedes-Benz, Smart and Maybach brands, saw nine-month sales rise to 124,600 in 2007 up from 116,000 in January-September 2006.

The company's shares were up 0.12 per cent to 72.93 euros (US$102.97) in morning trading.

Karl Benz (1844-1929) and Gottlieb Daimler (1834-1900) did pioneering work at the dawn of the automobile age in the 1880s but never met. Benz built a three-wheeled internal combustion vehicle in 1885 and patented it in 1886.

Daimler, working with partner Wilhelm Maybach, built a small internal combustion engine and mounted it on a two-wheeled vehicle in 1885, then installed it on a coach in 1886, according to the Gottlieb Daimler-Karl Benz Foundation, now located in Karl Benz's former mansion in Ladenburg near Heidelberg.

The companies founded by the two men were merged in 1926 to form Daimler-Benz AG. Daimler-Benz AG merged with Chrysler Corp. in a US$36 billion deal in 1998, in what then-CEO Juergen Schrempp called a ``marriage made in heaven'' as the German company looked for new markets and new opportunities.

But the deal was never popular with German shareholders, who saw the merger as dulling the sheen of one of their country's greatest automakers.

After a decade of up-and-down Chrysler earnings and repeated cost-cutting, DaimlerChrysler AG finally decided earlier this year to shed the American company.

In May, DaimlerChrysler AG's supervisory board gave its final approval to sell 80.1 per cent of its stake in Chrysler to the private equity firm Cerberus Capital Management LP in a $7.81-billion deal.

Zetsche said in August, however, that Daimler AG plans to hold on to its 19.9 per cent stake in Chrysler, and pledged ``close co-operation wherever it makes sense.''

The German company has changed its share symbol on Frankfurt and New York exchanges in August from DCX to DAI. But renaming will take through spring 2008, including everything from changing 170,000 e-mail addresses to the billboards showing the way to company headquarters in Stuttgart.

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DaimlerChrysler CEO defends company name change to shareholders
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