Dieter Zetsche: Lessons Learned from North American Auto Markets also Apply to European Industry

* Dieter Zetsche, Chairman of DaimlerChrysler: “Years from now, we will be judged by how quickly and effectively we (European business, labor and government leaders) respond”

* Focus on the core business, innovation, and global corporate citizenship as key competitive factors for European businesses

Brussels, Apr 29, 2006
In a keynote speech at the Brussels Forum on the “Transatlantic Challenges in a Global Era,” organized by the German Marshall Fund, Dieter Zetsche, Chairman of the Board of Management of DaimlerChrysler said that business, government and labor leaders must apply the lessons learned from the North American auto market when reacting to intensified competition in Europe.

“Here in the European Union, we need to learn from the American experience, because if we don’t, we may end up reliving it,” he told an audience of 250 heads of state, senior officials from the European Union institutions and the member states as well as parliamentarians, U.S. cabinet officials and members of congress.

While many emerging markets continue to have limited access for foreign competition, competitive pressures continue to increase significantly in Europe, partly due to market penetration by Asian manufacturers. As a result, automotive companies across Europe are engaged in restructuring efforts to remain competitive.

“It´s a very familiar story,” Zetsche said. “Years from now, we will be judged by how quickly and effectively we respond.”

According to Zetsche, who spent five years in Auburn Hills, Michigan, heading the Chrysler Group division of the company, European industry stands to benefit from studying and applying the lessons learned in the U.S. market, which he called “the battleground of the global auto-motive industry.” U.S. manufacturers, labor leaders and government are to be held responsible for not responding to the challenges more effectively.

“The important point here is not to blame globalization, but to draw lessons from the American experience about how to prepare for such fundamental change in Europe as well.”

Zetsche advised that every European company should try to “run lean, hard and fast.” A focus on the core business and continuous, customer-focused innovation as well as an adherence to the principles of good global citizenship are the decisive long-term success factors for European manufacturers competing with their counterparts. That is exactly the strategy DaimlerChrysler is pursuing:

“Companies must remain sharply focused on the core products or services that determine the fate of their respective businesses. That means for DaimlerChrysler that we are efficiently developing, producing and selling top-quality and fascinating cars in order to create ‘value added’ for all our customers, our shareholders and our employees. Moreover, we have always regarded innovation as a key competitive advantage, and we have a long history to back up that claim,” Zetsche said. In addition, he stressed the importance of being a good corporate citizen when doing worldwide business: “Global companies have a social responsibility to help people in the communities in which they work and live.”

Turning to the responsibility of governments in the transition to a global economy, Zetsche argued for the removal of all tariff and non-tariff barriers and for the liberalization of markets – including the transatlantic market.

When it comes to European social models, Zetsche said that whatever model chosen will have to be competitive on a global scale. “With globalization, at some point you have to make a choice about what a society can afford. The longer you wait, the more severe the consequences. Worse yet, the choices may, in effect, be made for you.”

The Brussels Forum is an annual high-level meeting of the most influential American and European political, corporate, and intellectual leaders to address pressing challenges currently facing both sides of the Atlantic. It is sponsored by the German Marshall Fund and several private and public partners.

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