Aerospace chief to take charge at Daimler-Benz: Schrempp will succeed Reuter next year

THE GENERATIONAL baton was readied for passing at Germany's biggest industrial group yesterday as Daimler-Benz picked Jurgen Schrempp as chief executive to succeed Edzard Reuter.

The 49-year old Mr Schrempp, who has demonstrated his acute leadership qualities during turbulent times at the helm of Daimler's Deutsche Aerospace subsidiary, will officially replace Mr Reuter, aged 66, in May next year.

Having spent 15 of his 27 working years abroad, Mr Schrempp symbolises the significance of international experience for the appointment of Germany's new generation of top managers.

As the incoming head of Daimler, in charge of 366,000 employees, he assumes responsibility for completing the ambitious and controversial mission begun by Mr Reuter, who expanded an essentially car-based business into what he likes to call a global integrated technology concern spanning aerospace, trains, cars, and power equipment.

While this aggressive expansion doubled turnover in less than a decade to nearly DM98bn ( pounds 40bn), Mr Reuter's vision exacted a high price in restructuring costs, weak synergies and sagging profits, culminating in Daimler's first postwar loss last year of DM1.8bn under US accounting rules. When Mr Reuter took over in 1987 Daimler posted a net profit of DM1.8bn.

A tough, energetic manager who made his mark for Mercedes in South Africa and the US, Mr Schrempp was entrusted by Mr Reuter with the hardest part of Daimler's metamorphosis, wrenching Dasa, formed in 1989 from parts of Germany's aerospace industry, into a coherent company.

The credit accorded to Mr Schrempp for having pushed through a skilful, aggressive and at times brutal restructuring at one of the most challenging periods for the international aerospace industry was a key factor in lifting him to the top job ahead of Helmut Werner, the 59-year-old head of the Mercedes-Benz division.

Mr Schrempp took on the job of beating Dasa into shape shortly before the Cold War ended, slashing the defence contracts on which the fledgling group relied so heavily, and the recession grounded the world's civil aviation industry.

Far from the original plan, which foresaw Dasa spearheading Daimler's transformation, Mr Schrempp found himself battling against overwhelming losses. He cut 16,000 of Dasa's 86,000 jobs, closed factories and sought international alliances.

Last year he purchased Fokker of the Netherlands in a bid to make Dasa the dominant player in the regional airline business.

A chain smoker with a penchant for bazooka-shaped Cuban cigars, Mr Schrempp shares Mr Reuter's preference for the long view. But, while his mentor cultivated an image as Germany's unconventional philosopher-businessman, Mr Schrempp favours a more robust, down-to-earth approach, although he is not averse to tackling the political establishment, a taste first developed in South Africa.