Mr. President, I wanted to share with my colleagues the text of a speech delivered by Jurgen E. Schrempp, chairman of the Board of Management DaimlerChrysler AG, on December 2, 2002, at an event sponsored by the Center for Strategic and…
Mr. President, I wanted to share with my colleagues the text of a speech delivered by Jurgen E. Schrempp, chairman of the Board of Management DaimlerChrysler AG, on December 2, 2002, at an event sponsored by the Center for Strategic and International Studies. I had the honor and privilege of introducing Mr. Schrempp at this event, and I hope his insights about the automotive industry and about international trade will be helpful as we, as a nation, work to strengthen our economy.
The speech follows.
The Transatlantic Partnership
1. Introduction--Senator Lugar, Excellencies, Honored
guests, Ladies and Gentlemen, Thank you for your warm
welcome. Senator, may I offer my special thanks for your
thoughtful and gracious introduction. Your remarks are deeply
appreciated, coming as they do from a world leader in the
field of foreign affairs. I would also like to thank the good
people from the Center for Strategic and International
Studies--and specifically Simon Serfaty--for their hard work
in making this conference such a success. The value of the
CSIS in facilitating dialogue about what route Europe and
America should follow, to fulfill their joint destiny, is
immeasurable. It's a great pleasure--and a privilege--for me
to be with you today. It is also an opportunity to talk about
an important, visceral part of my life. That is the
relationship between Europe and the United States.
2. A personal view of the United States--I have a very
personal view of this connection. My first real contact with
America came during the early eighties. I had been appointed
chief executive of Euclid, a Daimler-Benz subsidiary
operating out of Cleveland, Ohio. The company produced really
heavy-duty trucks. And it was my first really heavy-duty job
with Daimler-Benz. In this two-year period: I discovered the
bottomless hospitality of the American people. I discovered
the extent to which my body could produce adrenaline. I came
to grips with the reality of America's leadership in world
affairs. And I became very aware of our crucial transatlantic
links! Links in which DaimlerChrysler now has an extremely
healthy self-interest! DaimlerChrysler is, after all, the
most significant German-American company.
3. America's role in Europe--From my perspective, the
positive impact of American actions on Europe is central in
much of what we, as Europeans, have become. One of the
highest points I can recall was the role played by the 41st
President of the United States, and his team, in unifying
Germany. And, of course, ending the Cold War. Never forget:
It was the Americans who stood in the vanguard against
European communism. From thousands of kilometers away across
the Atlantic! I was certainly not surprised. America's warmth
and friendship has been a given for a long time. America
helped to establish the Berlin relief-corridor after the war.
It put in place the Marshall Plan to rehabilitate Europe. And
its contribution to the wider freedoms now enjoyed by
Europeans has been enormous.
4. The high stakes of alienating the EU from the US--Ladies
and Gentlemen, Stakes are high in the complex areas of
business and political diplomacy. Especially for the United
States and Europe. More than anything, our priority must be
to establish truths about one another and build on these. One
such truth is that we are totally wedded to the cause of
democracy. We are also inextricably bound together by the
cause of those freedoms that define our civilization. These
are the values that mark us as prime custodians of the free
world. These are the values for which we are prepared to
fight!
5. Commercial interdependence is the key--But it is not
only these strong emotional ties that underpin the
transatlantic bridge. Our commercial interdependence is a
vital part of that bridge's structure. The United States and
the European Union enjoy the world's most significant
commercial relationship. They are, quite simply, each other's
largest trade and investment partners. Together the United
States and the EU account for 40 percent of world GDP as well
as 80 percent of global foreign direct investment. It
requires very little analysis to establish that this joint
relationship is essential. Yet we now need to face a sudden
and strange reality. The exceptional goodwill characterizing
our historic links is being tested. Quite seriously, I might
add.
6. The DaimlerChrysler example of excellent US/European
relations--In this regard I have a real sense of deja vu.
Mainly because of my experience at DaimlerChrysler! This
merger offers the best example of outstanding transatlantic
relations I can think of. Why do I say this? Well, shortly
after the deal, global automotive markets began to
deteriorate. The highly acclaimed ``Merger of the Century''
was suddenly under fire. But we stayed calm. We were patient.
We held our course. Above all, we believed in ourselves. We
had an unshakable sense that we should not meet operational
challenges by changing our well-defined strategy. And, by the
way, why should we have done so? Mercedes-Benz, the most
valuable automotive brand in the world, remains the ultimate
benchmark in the luxury segment. Our Commercial Vehicle
Division was--and is--by some margin, the world's market
leader in trucks, vans and buses. Therefore, we were able to
focus on our main operational challenge. That was to
implement our turnaround plan at Chrysler. Since then our
phenomenal team in Auburn Hills has made outstanding
progress. As a result, Chrysler Group earnings for the full-
year 2002 will reflect a real turnaround. And on this score,
I believe the empowering union of German and American
interests was a critical factor. It prevented a deeper
financial crisis--similar to those experienced at Chrysler in
1979 and 1991--from occurring. And Chrysler now enjoys the
same access to credit markets as the rest of our group.
Bearing in mind what happened before, I'm sure many Americans
have recently breathed a huge sigh of relief!
7. The practical results of amalgamating Daimler-Benz and
Chrysler--You may ask how we turned the corner. Firstly, we
combined the very best of our American and German heritages.
Then we unlocked the vast potential of our joint experience
by working with extraordinary commitment--and loyalty--to one
another! I can say with considerable pride that since the
merger we have built an enterprise in which America and
Germany can have great confidence. We have harmonized
processes. We have exchanged components, engines and
transmissions and other commodities. For example, we decided
that state-of-the-art five-speed automatic Mercedes-Benz
transmission units would be manufactured in Kokomo, Indiana--
Senator Lugar's home state! It was also decided that, for the
benefit of our customers, these units would go into Chrysler
vehicles. But this is just the tip of the iceberg. This
investment is only part of a 30 to 40 billion dollar, five-
year investment plan for North America. It's a plan that will
offer optimal security for more than 100,000 employees, well
into the future! I should add that, very selectively, we
already share expertise and technology for different
products. The new Chrysler Crossfire will be the first highly
visible result of this policy. It is a breathtaking coupe.
With great American design and Mercedes components. The
Crossfire will hit the markets next year. At the point
where--as we like to say--Route 66 meets the Autobahn. But
what we have built together also has substantial global
implications. We are now able to develop crucial interests in
Asia. Our significant Japanese investment in Mitsubishi
Motors and our stake in Hyundai of South Korea are such
interests. So is the dynamic commercial vehicle business
we are building in the region. Yet this is not all. China
has moved into the frame as well. Soon we will have a
meaningful, viable operation there. Which is why we can
say with pride that ours is a truly global company.
8. Lessons from the DCX experience--Ladies and gentlemen, I
would like to share with you what tough times have taught our
great company. We have learned one of life's fundamental
truths. That success and happiness depend to a great degree
on an ability to confront and solve problems. Or challenges,
as I prefer to call them. Another fact is absolutely clear to
me. Today's positive results have come because Americans and
Europeans resolved to capitalize on their differences. We did
not succumb to them. We learned a third important lesson
during the recovery process. Successful relationships need
time for constant review and reaffirmation. Right now, I
believe this is of wider and special significance. And, in
this context, I feel a strong need for a constructive ``time
out'' in the debate on relations between the US and Europe.
There is currently far too much heat and far too little light
on the subject! We need to regroup!
9. Potential points of dispute--Before we can do that,
however, we have to concede that differences have arisen. The
first area of conflict concerns trade. We are predominantly a
transatlantic company. But trade restrictions imposed on
either side of the Atlantic sometimes have really negative
results! I think, for example, of US steel tariffs, and EU
penalties in response to the FSC decision. We are simply
caught in the crossfire. And our customers as well as
employees pay the price. But my purpose in mentioning this is
not to apportion blame. It is simply to note that trade
restrictions do more harm than good. I therefore agree with
the recent statement by President Bush that there is a need
to remove tariffs. And non-tariff-based trade barriers. I
hasten to add. Let's hope the leaders in charge of trade
issues go down this road! There is a second front on which
policy differences are always aired. The conflicting views of
Europe and the US on global environmental matters have
developed into a hot topic. Finally, geopolitical issues have
arisen around national security and defense commitments.
These discordant views are not restricted to partisan
arguments. There are also internal disagreements--on both
sides of the Atlantic. And, once again, most differences tend
to be about procedure and the degree to which action is
implemented. Fundamental objectives are seldom in dispute.
10. The need for openness and honesty--However, the problem
seems to be systemic. And in the process, concerns that
originate from fear have also emerged. Fear that unilateral
rather than multi-lateral action could be taken to secure
world peace. I think particularly of polarized policies on
Iraq. But I don't want to go into detail on that. I simply
want to make one point. Among great friends, such as the US
and Europe, we are able to discuss differing views with
complete honesty. In the same vein, however, we should do
this face-to-face, and privately.
11. Call to intensify result-driven dialogue between the
two continents--On the public front there is plenty of talk.
Talk about how to revive transatlantic initiatives. But there
is nothing that remotely resembles implementation. Let's get
past the pussy footing! It's time for meaningful engagement
and visible, tangible results. However, this will only come
from blunt, hard-nosed implementation! In 1998, I found
myself chairing the European section of the Transatlantic
Business Dialogue. The TABD was the brainchild of the late
Secretary of Commerce, Ron Brown and the former European
Commissioner, Martin Bangemann. Founded in 1995, it was
initially accepted by CEOs on both sides of the Atlantic with
some enthusiasm. I'm even able to say that we achieved some
encouraging results. But this organization, in its present
form, has been allowed to stagnate. What we now need is
dynamic interchange between the two continents. And such a
process must take place with mutual commitment and
enthusiasm from its transatlantic participants.
Particularly herby on the political side. I undertake
today that DaimlerChrysler will pursue any initiative
along these lines. Provided it leads to sensible,
intensified and result-driven work between us.
12. To keep the TABD or introduce a new process--At the
very least, we need to reinvent the TABD. Or it may be
preferable to start afresh. One thing is certain, however. We
need to engage a dynamic group of leaders who should
represent politics and business. They must select and tackle
important as well as relevant issues. And they must be
totally committed to the process of implementation. People
who are prepared to roll up their sleeves and get stuck into
things! People with a can-do attitude! People not afraid of
breaking new ground! People of passion!
13. The need for a highly principled, organized mission--
Such a body would be the best platform from which to proceed.
And build on what the U.S. and Europe have thus far
accomplished together. Which is an extraordinary amount! Take
the multilateral institutions that have served us so well
over the last 50 years. NATO, the IMF, the World Bank, the
World Trade Organization, and the United Nations are among
them! Quite clearly, their historic achievements signify an
important reality. Now, with the Cold War consigned
permanently to the deep freeze, some argue that we no longer
have a really big issue to unite us. That instead we hassle
over petty details. So I believe we have to find a new,
highly principled mission. One that binds our two regions
even more closely together! A mission that captures our
imagination! Along with the hearts and minds of our global
constituencies! In this connection, there are highly complex
tasks ahead of us.
14. The priorities of corporations and governments--I refer
to the finding of effective solutions for what Kofi Annan
calls ``problems without passports.'' This will demand
unusual levels of organization! It will also require great
determination--and dedicated focus. For instance, we have to
find common cause in the war against terror. But this should
primarily be directed at preventive action. Never again can
the infamy of September 11 be repeated. Joint intelligence
sharing and cooperation on the gathering of financial
intelligence would be a good start. Another constructive step
would be close cooperation on important initiatives like the
Nunn-Lugar program. This program is crucial. It offers
safeguards against nuclear and scientific material in the
former Soviet Union falling into the wrong hands. We
generally need to create fresh initiatives to neutralize any
other nuclear, biological and chemical agents of destruction.
But we need to step up investment in such programs, as well.
A second goal must be to bring democracy and economic
development to regions that have known too little of both. We
need sustainable development to lift people out of poverty
and abject subsistence. After all, half the world lives on $2
dollars a day--or less!
15. The need to safeguard and, where necessary, to rebuild
civil society--Last year I called for a concerted
international effort to rebuild civil society in broken
countries like Afghanistan. I repeat that call today. And I
do so because dysfunctional countries are much more of a
drain on global resources than those that operate
efficiently. We must therefore heed the lessons of the past.
The investment made in rebuilding Europe has been more than
repaid. In hard currency. In the fruits of stability. And--
together with the United States--in the development of the
most powerful alliance of nations the world has seen. Only
through this alliance will we be able to deal with problems
that threaten mankind.
16. Problems that endanger the human race--One such
diabolical problem is the spread of the HI Virus and AIDS.
More than 45 million people worldwide are currently infected
with the virus and face a painful, degrading death. In my
beloved South Africa this involves 25 percent of the
population! At DaimlerChrysler, combating the AIDS pandemic
is a priority. It's a priority recognized by the Global
Business Coalition on HIV/AIDS. In June this year, at a
function in New York, they acknowledged our tremendous South
African HIV/AIDS program. And when Kofi Annan handed me their
much-coveted award--for Excellence in the Workplace--I was
very proud indeed. At the same time I was appointed Chairman
of the Global Business Coalition. I welcomed this assignment
with a sense of humility--and urgency. For fighting this
dread disease--and dealing with the other problems I have
mentioned--represent the real challenges of humanity. It's
therefore high time to stop playing in the shallow end of our
global pool. We need to dive deep! But it is patently obvious
that the partnership, between the U.S. and EU is pivotal to
any prospect of real success. Together, we hold the key to
the health and wealth of the global economy. And that, Ladies
and Gentlemen, is an awesome responsibility.
17. Conclusion--We may, realistically, not be able to do
everything. But over the past 50 years, Europe and the U.S.
have changed the face of the planet. Very much for the
better! As partners, I'd back us as winners all over again.
Our common ground is solid and fertile. The challenges are
irresistible. The need for unity is more essential than ever.
The urgency that demands immediate engagement between us is
white-hot. And the time for a solemn pledge of trust in one
another is precisely right. I thank you.