As the reality settled in of Juergen Schrempp’s retirement from DaimlerChrysler and the ascension of Dieter Zetsche to replace him, several questions will need to be answered, according to conversations with executives close to the situation:
Will Schrempp engineer an ascension of his own to the chairmanship of the supervisory board? As reviled as Schrempp is, he still has powerful allies on the board and with labor.

Is there fire behind smoke that Schrempp and other senior Mercedes-Benz executives have opaque investments in supplier companies doing business with DaimlerChrysler, and will German justice officials press an investigation into the matter?

Will Mercedes-Benz chief Eckard Cordes really leave the company? And if so, will he join with an investment group to try and force a break-up of DaimlerChrysler by acquiring shares? Many investment bankers and shareholders feel that with Schrempp possibly gone from the company altogether, unless he hangs on to the supervisory board position, the company could be broken up with Chrysler being sold off.

Is there a way for Dieter Zetsche to get Wolfgang Bernhard back into the company? Bernhard was run out of the company last year before he had a chance to assume full control of Mercedes-Benz. His aggressive suggestions about reforming Mercedes angered the works council who pressured Schrempp to oust him. With Cordes likely leaving, could Bernhard quit his job as head of the Volkswagen brand group, sit out a year, which would be the minimum called for in his non-compete clause in his contract at VW and join back up with Zetsche in the middle of 2006? Would he want to? He is practically a lock to run Volkswagen after Bernd Pischetsrieder retires from VW. But he may prefer to return to Daimler where he’d be in line to succeed Zetsche and be on hand should Zetsche need Bernhard to return to Chrysler if Tom LaSorda doesn’t work out as CEO.

Is Dieter Zetsche committed to keeping Chrysler Group inside DaimlerChrysler? No one knows the outlook for the division better than Zetsche. Did Zetsche pare down Chrysler far enough to make it attractive for a buyer?

Only some of this will be answered in the next couple of weeks. But it’s a German soap opera that is worth watching.—Jim Burt

Schrempp in better days - when $36 billion really was worth something!

Juergen Schrempp may have won fewer friends at DaimlerChrysler than Donald Trump has real human hairs. But you have to love a German guy who unrepentantly swears he's more at home in South Africa! Side note: nothing is more entertaining than reading a press release full of barely-contained glee written at 4 in the morning.

Pontiac's GTO will motor on, despite the imminent changeover in Australia's Commodore/Monaro model range. GM's confirmation brings up all sorts of here-they-go-again rumors about a new Camaro that, frankly, we're not ready to face without a case of Pabst and a mullet. Give us time to grow it out again, will you guys?

XM is riding bitch with Harley-Davidson, just in time for the annual Sturgis rally. The satellite radio company is also creating a slew of new stations that cater to the new audiences: "Accounting and Riding," "How to Spend A Fortune in the Aftermarket (Without Really Trying)," and "Leather for Dummies."

Porsche finally confirmed it will build the four-door Panamera, making TCConfidential weep nostalgically for the never-built 989 project and the days when Porsches were numbered, and not named for lizards.

Employee discounts are so five minutes ago at General Motors, along with zero-percent financing, big rebates, and free vinyl half-roofs (we're going way back on that one). But will "value pricing" be the General's savior? Just look at what it did for the airlines!

Paul Krugman probably hasn't told any southern auto workers face to face that they're "illiterate" - but we're willing to pay for his airfare.

While we like some of the new car television shows, we're not so sure about NASCAR fielding a driver through a reality series. I mean, do NASCAR drivers really know how to act on television? Maybe they should train them for the media first.

Bill Ford is now on the board of directors at eBay. The five-day auction for Jaguar and Mercury ends on Tuesday - no reserve! Will ship worldwide.

Apple revamped iTunes to enable podcasting, leaving open the possibility that you'll hear 516 car fans arguing about Mustang versus Camaro from your theoretically high-tech audio device. But hey, it's better than Coldplay.

Only six weeks to go until the Frankfurt auto show! Get psyched! Bring orthopedic shoes, over-the-counter stay-awake meds and sense of angst.

For most people, the price of a car is important, it’s a figure we can deal with, a number we can assimilate, an integer we have incorporated into our budget and can live with. Sometimes we go a little above our budget for personal reasons, or because we feel we have deserved those extras that bump up the price by a few thousands above our budget. But, what the heck!

But, what about those cars that start running into the hundreds of thousands, and a million plus… or two or three million; how about $24 million?

Yes! I said - $24 million.

OK, so this car is not your average run-of-the-mill vehicle; it’s very unique and very special, and its price tag is $24 million buckaroos.

This car was raced by legendary drivers Juan Manuel Fangio, [the Argentinian driver considered by many to have been the greatest racing driver of them all. An incredible man that amassed dozens of victories in all kinds of cars, including five Formula One world championships, a record not equaled until last year when Michael Schumacher won his fifth title, although Michael never raced in a T-shirt and a 1-layer helmet as Fangio did, but so it goes, and Sir Stirling Moss OBE, arguably one of the greatest all-round racing driver of all time, known during his career as ‘Mr Motor Racing’] before ending up in a museum in the 1980s. Some years later, the museum needed money for much needed renovations so they sold it for a couple of millions. Three and a half years later, the 1954 Mercedes W 196 was sold again to a French industrialist for $24 million.

Of course this car is more than just a unique car; this ‘one-of-a-kind’ machine is the chef-d’oeuvre of racing cars, the gradālis platter of the car collection universe, this is the vehicle that dominated Formula 1 racing for both the 1954 and 1955 seasons. It was a complete departure from previous Grand Prix cars and revolutionized racing car engine design with a valve system which used positive control of valve operation without valve springs. This system prevented fluttering and thus allowed higher rpm. Another unusual feature was the power takeoff by means of gears in the middle of the crankshaft between the fourth and fifth cylinder, which considerably improved the elasticity of the engine.

It’s unbelievable and mind-boggling that a machine can cost so much money. But in the end, you can ask yourself if these vehicles are worth that much; Weighing in the parts, history and lore, the value still often resides in the eye of the beholder; cars are a sentimental affair and they're only worth as much as people are prepared to pay. And while your ride quickly depreciates after purchase, these classics have become works of art.

By the way, this 1954 Mercedes W 196 is now owned by a German entrepreneur and businessman; in June of 1998 many newspapers around the world reported him paying less than half the amount of the original $24MM. Did he get a deal?

DaimlerChrysler’s second quarter operating profit dropped 20 percent, but chairman Juergen Schrempp found a foolproof way to juice the stock and investors’ appetite. He resigned. Investors responded by driving up the stock price almost 10 percent on the news to $48.26 on The New York Stock Exchange. Schrempp will be gone by the end of this year, probably to retire to his beloved second home in South Africa, and will be replaced by Chrysler CEO Dieter Zetsche.

Reaction in Stuttgart was akin to the munchkins in The Wizard of Oz seeing the Wicked Witch of the East under the house. One commentator on CNN International quipped that German beer stocks also gained because of the celebrations that were expected this weekend throughout Germany.

The words most often used to describe Schrempp tend to be “imperial” and “arrogant.” Fortune Magazine auto writer Alex Taylor III even used “bully” in his Thursday online story. Schrempp has been reviled for years among investors, analysts and many employees as he has dismissed critics frustrated with the company’s loss in market capitalization since acquiring Chrysler in 1998, underestimating the problems at Chrysler, botching the transition of ownership, leaving inept American management in place too long, letting Mercedes-Benz drift sink in quality as it over-invested in glitch-prone electronics, not being able to turn a profit at the Smart division and forcing Wolfgang Bernhard out of the company essentially because he was too vocal about problems at Mercedes-Benz and for not backing Schrempp’s investment in Mitsubishi. More recently, senior executives under his watch were forced out after they were charged with misappropriating funds, selling gray-market cars and having work done on their houses by company employees. Enough was enough even for this German supervisory board.

Among the media covering DaimlerChrysler, conversations around bars and auto shows frequently drifted to disbelief that Schrempp still had a job at all, something often chalked up to his relationship with the DaimlerChrysler supervisory board, and especially with Deutsche Bank. But the big German bank confirmed Thursday that it is selling up to 35 million of its shares in DaimlerChrysler AG, representing about a 3.5-percent stake in the company. The remaining stake of the bank in DaimlerChrysler will be at 6.9 percent and the bank is widely expected to sell that down in the future. With DB becoming less a factor in DaimlerChrysler, Schrempp, whose contract was to run through 2007, was losing his political cover.

Zetsche is the opposite of Schrempp in most ways. He is more coach than king in management style. He is respected on both sides of the pond. He made friends easily when he arrived at Chrysler in 2001 with a cloud hanging over him as he and Bernhard replaced American managers. A USA Today article in 2002 quoted industry maven Dr. David Cole saying about Zetsche’s reception at Chrysler after six months on the job: “They expected Adolf Hitler and they got Martin Luther.”

Schrempp will hardly be missed.

Paul Krugman has some rather flaky opinions about the state of America. But we're not a political site - and Krugman's no car writer, which is why neither of us should try to cover the others' territory. Except Krugman has tried - and has gotten it wrong when it comes to Toyota's new plant in Ontario.

The plant is due to open in 2008; it'll build 100,000 RAV4s a year and employ 1300 people. It will stand less than a hundred miles from Toyota's existing plant that builds Lexuses and Corollas and Matrixes.

Now, getting a plant for some states is akin to winning a lottery - only the tickets for the lottery cost about $250 million, as they did for Alabama when they lured Mercedes-Benz to the state in 1993. In this case, Canada offered up a total of about $100 million in subsidies, far less than some U.S. states were bidding, apparently.

Krugman argues that America lost out on the plant (remember, it's 1300 jobs) because American workers were "illiterate." He cites a comment from a Canadian partsmakers' booster group as his evidence. And in the process, he falls back on ugly stereotypes and simultaneously shows off the thin research he performs as habit to write his columns.

Krugman repeats: "'Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment.'" Pictorials? Like the ones that come with IKEA furniture?

Are you offended? As a southerner who used to live in Alabama and has had "illiterate" auto-worker friends in Alabama, I am. Auto companies would no sooner hire illiterate workers to build their cars as they would to run them. Untrained? Yes, even though Alabama is now a hub of auto production. But illiterate? That must explain why not only Benz but Honda and Hyundai have chosen Alabama for production. Or Nissan in Tennessee. Or BMW in South Carolina. Or Toyota itself most recently, in Texas.

Krugman's threadbare argument comes right from DailyKos, the liberal blog thought leader condemned by Bernard Goldberg in his tight new book, 100 People Who Are Screwing Up America". And Kos gets it straight from the CBC - that's right, the Canadian Broadcast Company, the same CBC that blathers against red-state America at every turn - and Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, whose the CBC adds (and Krugman must have missed) "will see increased business with the new plant."

"The educational level and the skill level of the people down there is so much lower than it is in Ontario," Fedchun said.

It's a common gambit for prejudiced writers from the rest of the country to fall back on stereotypes. "The workforce isn't as good as Canada" is Krugman's code language for "southerners are stupid." So why do factories hum in just about every southern state? Why did Toyota choose Mexico for additional Tacoma production? Presumably, with educational levels dropping off the cliff the further south you go from New York City, Baja Mexico would certainly lose out to the metro Birmingham area. Why would Toyota expand engine production in Alabama within the past year?

Of course Krugman's goal isn't to adequately describe the auto industry, it's to set up a straw man to push his argument that America should offer health insurance. Never mind that the Constitution doesn't mandate my right to Viagra - Krugman only sees industry through the lens of how it can enrich his ideals, not how it can enrich the thousands of auto workers now employed in Texas, Tennessee, Mississippi, Alabama, Georgia, South Carolina and North Carolina.

There is, after all, a bottom line every manufacturer must heed. And there is a difference in workers who are new to building cars, versus those moved around from Michigan to Ohio depending on where the union can resettle them. In the 25 years since Nissan set up in Tennessee, it's been no mystery what quality of workers are available in the Deep South. And though some require more training, it's still a much better proposition than building a plant in a unionized area - unless, as in Ontario, Toyota overcame the cost disadvantage by getting hundreds of millions in tax concessions, saved money by coupling the back-office operations with another plant and saved money on the materials for construction by building in a country with a lower materials cost basis.

Repeat after me, Paul - Southerners aren't stupid. But sometimes, columnists are.