[Congressional Record (Bound Edition), Volume 149 (2003), Part 5]
[Senate]
[Pages 6792-6793]
[From the U.S. Government Publishing Office, www.gpo.gov]


                            DAIMLERCHRYSLER

 Mr. LUGAR. 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, Excellen-
     cies, 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

[[Page 6793]]

     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.

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