Daimler Board of Management decides on first steps to strengthen the divisional structure
STUTTGART, Germany, Oct. 16, 2017 /PRNewswire/ --
-- Plans for three legally independent entities under the roof and lead of
Daimler AG
-- Strengthening of the corporate structure will serve future success of
Daimler
-- Agreement with employee representatives on cornerstones of a balance of
interests will secure the future of Daimler employees
-- Targeted new structure will help to better focus on changing
requirements of markets and customers
-- No plans for divestment of individual divisions
-- Daimler will invest a three-digit million euro amount for the first
steps
-- Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG
and Head of Mercedes-Benz Cars: "Whoever aims for sustainable
competitiveness and profitability must continuously evolve and adapt to
rapidly changing surroundings - technologically, culturally and also
structurally. We are following a straight-forward strategy and have
decided to examine a new divisional structure for our company against
this backdrop, to make sure we are optimally prepared for the challenges
in the new automotive era."
-- Bodo Uebber, Member of the Daimler Board of Management responsible for
Finance & Controlling and Daimler Financial Services: "We are creating
the conditions for greater customer and market focus and therefore more
growth opportunities. Not only our customers and investors, but above
all our employees would benefit from that."
-- Contribution of EUR3.0 billion to German pension fund of Daimler AG to
increase the funded status of the pension obligations, subject to the
approval of the Supervisory Board
-- Approval to implement a possible new structure at the earliest by the
shareholders' meeting in 2019
Daimler AG aims to further focus and strengthen the Group's corporate structure through the creation of legally independent entities. In addition to the existing legally independent division Financial Services, the divisions Mercedes-Benz Cars & Vans as well as Daimler Trucks & Buses may be transferred into two legally independent entities to take greater entrepreneurial responsibility. This project intends to strengthen the future viability of the business units and better utilize the potential for growth and earnings in the various markets. Safeguarding Daimler's future is based on three pillars: protecting and increasing the company's success, pushing forward with shaping the future for the employees, and ensuring the long-term commitment of investors.
Based on the positive results of a feasibility study, the Board of Management today decided, subject to the approval of the Supervisory Board, to continue with the project and in this context to take preparatory measures. Daimler will invest a three-digit million euro amount for these first steps.
Close consultation is taking place with the employee representatives; an agreement has been reached on the cornerstones of a balance of interests to secure Daimler's employees' future. Major elements are the extension of the agreement on safeguarding employment until the end of 2029 ("Zukunftssicherung 2030"), increasing the funded status of pension obligations and an extension of the common profit-sharing bonus of Daimler AG.
"Daimler is today facing an exceptional challenge: On the one hand, we are more successful than ever before; on the other hand, our business is changing like never before," stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. "Whoever aims for sustainable competitiveness and profitability must continuously evolve and adapt to rapidly changing surroundings - technologically, culturally and also structurally. We are following a straight-forward strategy and have decided to examine a new divisional structure for our company against this backdrop, to make sure we are optimally prepared for the challenges in the new automotive era."
With the possible implementation of a new structure under the roof and lead of Daimler AG, there would be three independent entities:
Mercedes-Benz Cars & Vans and Daimler Trucks & Buses as two new entities, and the existing legally independent Daimler Financial Services AG. The three entities would continue to have their registered offices in Germany. Daimler AG does not plan to divest any of its divisions.
"We want to secure Daimler's future from a position of strength. For that reason, we not only need to be as close as possible to our customers' pulse, but also to be able to react as quickly and flexible as possible to market developments and a fundamentally changing competitive environment," explained Bodo Uebber, Member of the Daimler Board of Management responsible for Finance & Controlling and Daimler Financial Services. "With this project, we are creating the conditions for greater customer and market focus and therefore more growth opportunities. Not only our customers and investors, but above all our employees would benefit from that. We are cooperating with the employee representatives at all levels."
Under the roof and the lead of Daimler AG strong divisions would be created with own entrepreneurial responsibility and high value added potential, and so being prepared with even more market and customer focus for the challenges in the new automotive era. At the same time it would be assured that the synergies would remain unchanged. The Group does not pursue any savings or efficiency programs or the intention to cut jobs.
With a stronger divisional structure, Daimler will have a consistent and best-possible focus on the future to set standards worldwide in products and mobility services as a corporate family. With this project, Daimler is enabling focused cooperation and partnerships, securing necessary investments in technological transformation and digitization, and addressing changed customer behavior and market volatility.
In connection with the balance of interests, Daimler plans a contribution of EUR3.0 billion from liquid funds to the German pension fund of Daimler AG in the fourth quarter 2017, subject to the approval of the Supervisory Board. This is to increase to funded status of the pension obligations. Furthermore, the company is reinforcing its employees' pension commitments and intends to contribute to the strengthening Daimler's A-Rating.
Until now, neither the Board of Management nor the Supervisory Board of Daimler AG has made a final decision on implementing the new structure for the Daimler Group. Both boards will come to a final resolution after the ongoing assessments and negotiations have been completed, such as tax-related issues or a comprehensive due diligence. Should the Board of Management and Supervisory Board decide to finally implement the new Group structure, those measures would require the approval of a shareholders' meeting of Daimler AG. Such a motion could be voted on at the earliest at a shareholders' meeting in the year 2019.
Further information from Daimler is available at:
www.media.daimler.com and www.daimler.com
Forward-looking statements:
This document contains forward-looking statements that reflect our current views about future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "can," "could," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations or of investigations requested by governments and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading "Risk and Opportunity Report" in the current Annual Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.
Daimler at a Glance
Daimler AG is one of the world's most successful automotive companies. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles with a global reach. Daimler Financial Services provides financing, leasing, fleet management, insurance, financial investments, credit cards, and innovative mobility services.The company's founders, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. As a pioneer of automotive engineering, it is a motivation and commitment of Daimler to shape safely and sustainably the future of mobility: The Group's focus is on innovative and green technologies as well as on safe and superior automobiles that appeal and fascinate. Daimler consequently invests in the development of efficient drive trains with the long-term goal of locally emission-free driving: from hightech combustion engines about hybrid vehicles to electric drive trains powered by battery or fuel cell. Furthermore, the company follows a consistent path towards intelligent connectivity of its vehicles, autonomous driving and new mobility concepts. This is just one example of how Daimler willingly accepts the challenge of meeting its responsibility towards society and the environment. Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities in Europe, North and South America, Asia, and Africa. Its current brand portfolio includes, in addition to the world's most valuable premium automotive brand, Mercedes-Benz (Source: Interbrand-Study "The Anatomy of Growth", 10/5/2016), as well as Mercedes-AMG, Mercedes-Maybach and Mercedes me, the brands smart, EQ, Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses, and Daimler Financial Services' brands: Mercedes-Benz Bank, Mercedes-Benz Financial Services, Daimler Truck Financial, moovel, car2go and mytaxi. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2016, the Group sold around 3 million vehicles and employed a workforce of more than 282,000 people; revenue totalled EUR153.3 billion and EBIT amounted to EUR12.9 billion.
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SOURCE Daimler North America - Corporate Communications
