When we reviewed the new S500 for our May 1999 issue - 2005 Mercedes-Benz S500 Review
0Loaded with leading-edge tech, the W220 S-class set a high bar and sometimes tripped over it.
It couldn't be easier to praise the Mercedes-Benz S-class. The feeling it imparts to owners and the cultural capital it commands are contained in its name: Sonderklasse. Special Class.
Decades of plaudits for one S-class after another make the W220 S-class, revealed at the 1998 Paris Motor Show and sold from 1998 to 2005, a special entry in the annals of special cars.
When we reviewed the new S500 for our May 1999 issue, we called its shape "emotional," its interior "warm-blooded, approaching tropical in its sensuousness," and said it "sets a benchmark" on the curving roads used for our 10Best selection. The technical highlights took one staffer nearly two hours to learn. At the end of our review, we asked, "Is this the world's finest car?"
But the W220 was just as complicated as it was special, because all of its advances led to distressing consequences. Some decried the svelte styling as Mercedes giving in to fashion. (The W220 would have made more design sense following the W126 instead of the W140.) The advanced, sensuous interior design was let down by clearly inferior materials. And all those initially masterful electronics? They broke. A lot. The reason for that: The W220's backstory was even more complicated than the car.
No S-class, even one that can drive itself and park itself, develops itself. It'd be hard to get a tormented and financially poorer W220 owner to agree, but the worst part of the W220 wasn't a component, it was the cataclysms at Daimler and Mercedes-Benz throughout the 1990s. The German industrial bedrock heaved for a solid 12 years, and the cars cracked.
Six contextual threads braided themselves into a tasseled whip called the W220 S-class, seemingly designed to punish owners. (And the S-class wasn't the only weapon of indulgent destruction. The 1996 W210 E-class was arguably worse, one of its foibles a diesel engine racked by an issue called Black Death.) Viewed in aggregate, one might be surprised the W220 didn't come out worse.
Here's what happened: In the late 1980s and early 1990s, Daimler-Benz CEO Edzard Reuter tried to turn Daimler into a global tech company through what the New York Times called an "acquisition spree, buying into aerospace, defense, electronics, rail systems, financial services, software, and household appliances." Reuter wasn't an engineer and didn't jibe with Mercedes's conservative, bank-vault engineering ethos. His interest in the car division was that it mined the money to pay for his run at an empire. A recession in the early 1990s helped end that run in 1995, the company awash in red ink.
Jürgen Schrempp took over. Often cast as a German version of General Electric CEO icon Jack Welch, one of Schrempp's nicknames was Mr. Shareholder Value. In the 1996 Daimler annual report, Schrempp's opening statement targeted raising Daimler-Benz's operating margin to 12 percent. This would be done by increasing efficiency and cutting costs via efforts like internal competitiveness drives and Daimler's embrace of Japan's just-in-time manufacturing.
It worked. At the end of 1996, Daimler-Benz was profitable again. That profit grew the next year. In 1998, The Independent wrote Schrempp "would be remembered as the man who transformed the ill-focused German industrial company into one of Europe's most profitable carmakers."
Honeymoons are great.
As Schrempp pared fat, he also embarked on empire building. Whereas Reuter cobbled together disparate companies, Schrempp wanted to build the world's largest automaker, a juggernaut he called Welt AG or World Inc. He incorporated Mercedes-Benz into Daimler in 1997, orchestrated the DaimlerChrysler "merger," sealed in 1998, then took a controlling 37.7-percent stake in Mitsubishi and a 10.5-percent stake in Hyundai in 2000.
Concurrent with budget cuts and empire building, Mercedes-Benz passenger-car boss Jürgen Hubbert, an urbane and imperturbable German nicknamed Dr. Mercedes, exploded the model count. In 1987, Mercedes sold five passenger-car lines. By 1997, five had become 10. The next decade birthed another four model lines, two whole brands in Smart and Maybach and a one-off supercar, the Mercedes-McLaren SLR.
In 2007, a Mercedes executive confessed, "The flood of new products caused us a lot of problems." According to Automotive News, suppliers at the time said Schrempp took Mercedes's focus off engineering. Schrempp believed Mercedes cars cost too much to produce and sell because of "overengineering." Daimler's distractions ended up gutting basic engineering.
In 1995, when Daimler-Benz's board approved the W220's final design, however, no one knew that was happening.
The rise of the personal computer in the 1990s turned chip-based car technologies into a brand differentiator and profit center. In our review of the W140 S-class that preceded the W220, we wrote that the sedan's body was "packed with hardware