PPRuNe Forums - View Single Post - New AF/KLM CEO killing the one part of the company that makes money?
Old 15th Feb 2019, 13:31
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PAXboy
Paxing All Over The World
 
Join Date: May 2001
Location: Hertfordshire, UK.
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ATC Watcher nails it. Since the 'merger' took place not a great deal has changed and all the usual advantages of a merger have not been realised. When merging, the best is to action FAST. Push the two together and do the horrible job of making redundancies and cuts - THEN build something new and, hopefully, improved. If they do not change they will get taken over, however, SkyTeam cannot let them fail. Many fireworks before this is settled.

Countless large mergers fail because the two cultures will not merge or were not compatible in the first place. Daimler Chrysler for example threw away some $29 BILLION. The whole article (and others related to this huge waste of money) should be read by all at the top tables in KLM/AF (of course there is the problem - there should only be one top table): Harvard Business Review
That Daimler can sell Chrysler as a more-or-less intact unit to a private equity firm tells you all you need to know about why the combination failed. The two organizations never were integrated into anything that approached a cohesive whole. The potential synergies that were used to justify the deal went unrealized.

Why did this happen? Because the two organizations really didn’t like each other, and couldn’t cooperate to the extent necessary to make the combination work. Serious efforts to integrate the operations of Daimler and Chrysler foundered on lack of trust clashes between the mid-market cowboys of Detroit and the high-end knights of Stuttgart.

The seeds of post-merger disintegration were sown early when it became obvious that a “merger of equals” was actually a takeover of Chrysler by Daimler. And there were unbridgeable differences in the cultures of the two organizations. As is too often the case in acquisitions, the synergies were all on the surface.
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