First, there was no merger with Chrysler. MB bought them and, I guess not to offend Americans - who knows?, called it a merger. All the top ex-Chrysler management promptly went away. It was a 100% MB-run show.
MB quality went down because MB management let it go down...and it was happening well before the Chrysler purchase.
In fact, pretty much every German brand, possably Porsche excepted, has had (and in some cases still has, a quality problem. It appears that things are improving, however, but poor quality is a slippery slope that is hard to climb once you slide down it. We'll see.
I chose to buy my first MB...a 2008 E320 CDI because after exhaustive research and the value in buying a Certified Pre Owned felt it was the best investment...quality, fuel efficiency, safety,ride etc. After seeing my neighbor survive a head on collision where both cars were traveling about 65mph, I was sold. I have been extremely happy with my first MB with no problems after 1.5yrs. After our Honda Odyssey was totaled this past July 4th, I increased my research on the R320 CDI. Just made an offer on a 2008 yesterday...loaded to the hilt. Very excited.
The Honda..., I was glad to see it go. As far as I'm concerned, it was a lemon. Blown transmission at 78K. Paint peeling off around rear windows and doors and after they repainted, it continued peeling. Trim pieces missing when delivered brand new. DVD crapped out after 1.5 yrs. Rear main seal blew after transmission changed. Rear windows stopped working. Right roof rack came apart while driving. Replaced the rear door struts twice. Rear A/C control stopped working at 85K. Power steering failed two years after purchase. These are just off the top of my head.
As far as the nose dive in quality of MB, I blame the merge with Chrysler! While they were in bed with them, Consumer Reports hardly ever recommended them. Soon after the divorce, they now have 5 Recommended Buys. Interesting.
American Made? I think its hit or miss. I grew up with a father who was a Chevy Man all his life and we were always working on them. (He was a certified master mechanic on the side) I have a 96 Jeep Grand Cherokee that runs like a champ. 197K on it. Only had to replace the radiator, water pump and oil pressure sensor. Not bad. I truly believe if you take great care of any car, it will last forever.
For me, it will be MB from here on out.