THE CHRYSLER DEAL

The Age Of 'Globality'

 
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YERGIN is coauthor with Joseph Stanislaw of ""The Commanding Heights: The Battle Between Government and Marketplace That Is Remaking the Modern World'' (Simon & Schuster, 1998). He is president of Cambridge Energy Research

It was a stunning deal. Even more stunning, says a Pulitzer Prize-winning author, is what DaimlerChrysler tells us about the world.

BIG'' IS IN, AND ""VERY BIG'' IS VERY IN. Barely a week goes by without another large and often astonishing merger. There is hardly time to recover from Citibank and Travelers, with its frontal challenge to New Deal banking rules, before Daimler-Benz and Chrysler take to the road, shaking the automotive and financial world. In between, a couple of huge banks get together, and Germany's dominant publisher sweeps in to acquire perhaps the most famous name in American books. What seemed to be the megamergers of yesteryear begin to look more like minis.

The scale and audacity of these combinations are impressive, of course. But they also make people vaguely uneasy. Are these combinations becoming too powerful, too dominant--simply too big? The cross-border mergers provoke a deeper anxiety: will the tidal wave of transactions wash away national character? The question is particularly pointed for ""DaimlerChrysler.'' After all, Chrysler was enough of a national champion to be bailed out by the federal government in 1978; and somehow it seemed altogether fitting that rescuer-in-chief Lee Iacocca would also take on the project of refurbishing another national icon, the Statue of Liberty. For its part, Daimler-Benz is the very epitome of German engineering prowess and its Mercedes cars the embodiment of prestige on wheels.

The $38 billion proposed combination underlines a momentous fact: the world is entering into a new type of capitalism. Karl Otto-Pohl, the former head of the German Bundesbank, calls it ""the era of very big companies.'' And those very big companies, in turn, reflect the fact that the world economy is undergoing fundamental change.

For several years now, ""globalization'' has been the mantra for the expansion of international trade and foreign investment and the integration of markets. But we are now beginning to see a reality beyond globalization--the world of ""globality.'' This is not so much a process as a condition, a world economy in which traditional and familiar boundaries are being surmounted or made irrelevant. Companies and investors operate in a 24-hour world. Currency traders see the same information at the same time, and can act on it simultaneously, whether they are in Singapore, London or New York (assuming only that they are all awake at the same time). Billions of dollars move at the push of a button. Global branding is the great game. Work is networked among North America, Europe and Asia via computer. And even the very idea of a corporate headquarters is beginning to become a metaphysical concept; increasingly, the corridors in which managers run into each other are not physical but electronic.

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