No, we're not talking about Tony Romo and Jessica Simpson's impending breakup. We're quoting directly from the mustachioed horse's mouth. The headline my friends, is none other than Daimler CEO Dieter Zetsche (Dr. Z to you and me) discussing why the 1998 "merger of equals" between Mercedes-Benz and Chrysler failed so miserably. To refresh your memory (in case your life is filled with more interesting activities than watching the disintegration of poorly planned global corporations)… Daimler sold Chrysler for billions and billions less than they paid for it to a hedge fund last year. Our favorite David Cross-lookalike CEO was speaking to gathered business leaders at a symposium about "Global Capitalism, Local Values" trying to explain exactly what went so badly. He points to the level of cooperation between MB and Chrysler as being "less" than he would have liked. Dr. Z goes on to say that Daimler learned a valuable lesson. "It's fair to say that we overestimated the potential of passing leading-edge technology from Mercedes-Benz to Chrysler. Unlike premium brand customers, American volume brand customers are far too price-sensitive to absorb its cost." To which TTAC says, "Duh!" And of course, know thy brand.

Old fogies like me remember when BMW's GM-sourced automatic transmissions caused sturm und drang. Brand dilution! How can we Germans rely on a foreign competitor [at least in theory] for a key technology? So much for that. So why all the hubbub when BMW reveals they'll share engines with another carmaker? At last weekend's annual shareholder meeting, CEO Norbert Reithofer caused an uproar by announcing that the next-generation 1-Series will have a four-banger developed with PSA (Peugeot/Citroën). Reality check: BMW's MINI started life with a Brazilian-built Chrysler-designed Tritec engine. The MINI One D used a Toyota-built diesel engine. From November 2006, the MINI Cooper and MINI Cooper S models have been powered by a 1.6 litre engine co-developed by BMW and PSA Peugeot-Citroën. But propeller-heads don't want a Bimmer-badged car to mix genes with the French. The Financial Times Deutschland calls the move a "taboo breaker," while shareholders bemoan the brand's move from "class to mass." Ever the beancounter, Reithofer prefers to focus on saving money: "A car's engine is responsible for 25% of the car's total manufacturing cost." So that's alright, then.

Automotive News [sub] reports that Opel is moving upmarket. It's GM's attempt to "democratize technology" and emphasize their Euro-brand's "traditional German manufacturing attributes." The new strategy is designed to move Opel away from its image as "the European Chevrolet"– so that Chevrolet can become the European Chevrolet. "Opel and Chevrolet will be bookends with a clear position for both," GM-Europe President Carl-Peter Forster promises. "Over time, we will emphasize Opel's German heritage, engineering and design." But don't worry: GM plans to keep the German domestic affordable. "We are not talking about a premium price for Opel," Forster said, "but a one percent to three percent increase is foreseeable." Design, technology and image are all part of the brand touch-up– not, Forster insists, a "reinvention." Yes well, Europe is facing a premium small car glut as Fiat, MINI and others seek full-sized profits from compact cars. With GM dependent on overseas sales to keep the wolf from the door, Opel had better hope this gambit pays off.

Has BusinessWeek been reading TTAC? Writer Michael Frank's assessment of Saab and Volvo sounds extremely familiar… Frank places Saab's problems right where they belong, stating GM "hasn't let Saab do anything creative, let alone steer itself in any direction other than toward total irrelevancy, for a good decade." But what's wrong with Volvo? "[L]ike famously angst-ridden compatriot filmmaker Ingmar Bergman, Volvo fears sexy… its slammed and ultra-turboed R-edition cars… are, for all intents and purposes, neutered and dead [because] Volvo is worried about fuel economy." The biggest problem for both, though: they've lost their brand distinction. As we've pointed out, Volvo no longer holds the upper hand in safety. Turbocharging is no long a Saab distinction. He wants something new from both automakers but concludes, "Oh, right, neither Volvo nor Saab has a new story to tell. And until they do, neither carmaker will have much of a future." To which all we can add is "Amen."

Kia wants to cut back on its reliance on ye olde cash on the hood and increase its brand awareness in the U.S. To that end, the Korean automaker is launching a new ad campaign today that "continues to emphasize the thriftiness of its product line in times of escalating gas and food prices." BrandWeek reports that one ad shows a Kia Spectra in front of a gas station while a narrator proclaims: "Now, more than ever, you want to get the most for your money." And an ad for the Kia Sportage claims the CUV is priced "about $6,000 less than the Toyota Rav4 Limited; or, to put it another way, a whole year worth of groceries less." Kia's marketing director is suitably upbeat about the downbeat American economy. "It's not all doom and gloom; in fact we believe the opposite," says Tim Chaney. "People are still shopping for cars, albeit less than before, and we are in a good spot." Chaney took over as marketing maven back in February when his predecessor, along with CEO Len Hunt, "were let go." Time will tell if this new team can pull Kia's image out of the background noise.

Here being China. We being GM. The speaker being GM CEO Rick Wagoner. And yet… Automotive News reports that The General is deploying Ye Olde "A Car for Every Purse and Purpose" strategy developed by Alfred P. Sloan– and then annihilated by every cash-grabbing, corner-cutting CEO since, sending the former world's largest automaker sliding towards bankruptcy. Never mind; it was implementation that killed the golden goose. "The China market also gives it a rare chance to try to repeat the business past with a happier ending for investors… GM introduced Chevy to China just three years ago after concluding its Buick brand was over-extended by a product line-up that had saddled it with everything from a minivan marketed as a kind of executive taxi to a cheaper hatchback. 'We could see Buick was being stretched,' [GM's head of Asian operations Nick] Reilly said." Uh, hello? Buick still sells the same product line-up in China as before. They've simply added Chevy (i.e. rebadged Daewoos). Oh, and Cadillac's in the People's Republic as well. What are the chances GM will show the same branding discipline in China that they've shown in the U.S.? And if it's good enough for China… 

You know how awesome the GMDAT Suzuki Forenza sedan is? Unfortunately, we've never reviewed it here at TTAC, which is mostly due to our intimidation by the 127 horsepower engine. Still, the car has a real global role. In Canada (where it was recently discontinued) it was known as the Chevy Optra. In the UK, the Chevy Lacetti. And in China? It's a luxury car! The Buick brand, very strong in China, is offering this same car as the Buick Excelle, and they've just released pictures of a refresh. What a travesty that they would dilute the absolutely crucial Buick brand name in its only viable market – China – with a car like this. I spoke with Ash Sutcliffe of the China Car Times website, who responded to my brand dilution concerns as such: "…it could be that the Excelle is very cheap, and they feel that they are getting an American car for a Chinese price." In fact Sutcliffe says the price is in the heart of "first new car" territory. It's too bad that what's exciting for the first new car buyer is bad for the guy considering a Chinese Buick Park Avenue that costs 5 times as much as the Excelle.