Honda website
Honda website

JANUARY 20, 1997

...but trouble in Stuttgart

HELMUT WERNER, the chairman of Mercedes-Benz AG since 1993 - and the man who has championed the company's involvement in top level motorsport - will leave the German car company this week. Werner has lost a three-month power struggle over whether Mercedes should be merged back into its struggling parent company Daimler-Benz AG, run by Jurgen Schrempp.

Schrempp has been Daimler-Benz chairman since 1995 when he replaced Edzard Reuter, who had led the company on a spending spree in the 1980s in an attempt to turn the company from being a motor manufacturer into a worldwide technology giant. As part of the expansion in 1989, Reuter created four independent divisions of Daimler-Benz: car-maker Mercedes-Benz, the aerospace offshoot DASA, electronics company AEG and a financial services company called Daimler-Benz Interservices AG.

Reuter's dream failed with the downturn in the global economy, and in 1995 Daimler-Benz made a loss of $3.9 billion, despite the fact that Werner's Mercedes delivered a $1.5 billion profit. Reuter was edged out, leaving Werner and Schrempp (the head of DASA) to fight it out for the top job. Schrempp won that battle and has since been dismantling Reuter's empire, closing down DASA, merging AEG back into Daimler-Benz and slashing 25,000 jobs.

The loss of Werner could be a major blow for Mercedes motorsport, despite the fact that the decision to adopt an aggressive approach in the sport dates back to 1987 when Werner Niefer became Mercedes chairman. The company backed Sauber to great success in sportscar racing but in December 1991 Niefer canceled plans to enter F1 openly with the Swiss team.

Two years later, soon after Werner took over from Niefer - Mercedes-Benz announced that it was buying a 25% shareholding in Ilmor Engineering and entering both F1 and Indycar racing.

Werner agreed to the Mercedes switch from Sauber to McLaren at the end of 1994 but has had to endure two seasons without victory. Schrempp is not likely to be willing to accept further failure in F1.