DaimlerChrysler AG Chief Executive Juergen Schrempp, whose 1998 takeover of Chrysler Corp. created the worldÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s fifth-largest carmaker, will step down on Dec. 31. The companyÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s stock had its biggest gain in three years.
The news came as the company reported improved second-quarter earnings and a slight rise in sales.
The company also said Eric Ridenour will take over for LaSorda.
The company that emerged from SchremppÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s 1998 attempt to create a global auto giant has struggled, first with heavy losses at the Chrysler division and now with weak earnings at former cash cow Mercedes.
Mr Schrempp has characteristically met criticism from shareholders with temper flares and a somewhat arrogant defence. When quizzed over the disappointing performance of the Smart brand in April this year, he shrugged off the question in an outburst of anger, saying it represented only a small proportion of the groupÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s total revenues.
"SchremppÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s stepping down should absolutely be seen as positive for DaimlerChrysler," Juergen Pieper, an analyst at Metzler Bank, told Reuters. "Schrempp has made too many poor strategic decisions in the past. Zetsche should bring a breath of fresh air."
Mr Zetsche, 52, helped turn around Chrysler, AmericaÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s third-largest carmaker, at a time of fierce competition in the US. The German manager will be the groupÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s chief executive for five years, after which ChryslerÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s chief operating officer, Thomas LaSorda, will take over.
News of Mr SchremppÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s departure came as Daimler announced second-quarter profits of ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬ 737m, compared with ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬ 577m a year earlier.