Daimler will retain 19.9 percent of Chrysler and continue to work with it on drive systems, purchasing, sales and financial services outside North America. But it was clear that DaimlerChrysler and its chief executive Dieter Zetsche, who tried to prop up sales in the U.S. with his “Dr. Z” television commercials, had lost confidence that a combined Chrysler and Daimler could be a worldwide automotive leader.

“We determined that DaimlerChrysler, as currently structured, would not provide the best” framework, Zetsche told reporters in Stuttgart, adding that “at the same time, given my experience with and commitment to Chrysler, this was a difficult task for me personally.”

Shareholders reacted positively. DaimlerChrysler’s U.S. shares rose $2.98, or 3.77 percent, to $82 in Monday morning trading.

DaimlerChrysler said the deal is likely to be completed by the third quarter and that it would reduce its overall profit by as much as $5.4 billion for 2007.

Snow said that under Chrysler’s leadership, the company’s quality and productivity have risen and it has a variety of new products that will be well-received in the marketplace.

“We’re going to support those initiatives and we’re going to support your plans,” he said.

Shareholders must approve changing the German company’s name to Daimler AG. A vote will likely be scheduled this fall, the company said.