Daimler AG (German pronunciation: ['da?ml? a:'?e:]) is a German multinational automotive corporation. Daimler AG is headquartered in Stuttgart, Baden-Württemberg, Germany. As of 2014, Daimler owns or has shares in a number of car, bus, truck and motorcycle brands including Mercedes-Benz, Mercedes-AMG, Smart Automobile, Detroit Diesel, Freightliner, Western Star, Thomas Built Buses, Setra, BharatBenz, Mitsubishi Fuso, MV Agusta as well as shares in Denza, KAMAZ, Beijing Automotive Group. The luxury Maybach brand was terminated at the end of 2012, but revived in April 2015 as "Mercedes-Maybach" versions of the Mercedes-Benz S-Class and G-Class. In 2016 Daimler sold 3.0 million vehicles. By unit sales, Daimler is the thirteenth-largest car manufacturer and is the largest truck manufacturer in the world. In addition to automobiles, Daimler manufactures buses and provides financial services through its Daimler Financial Services arm. The company is a component of the Euro Stoxx 50 stock market index.
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History
Daimler AG is a German manufacturer of automobiles, motor vehicles, and engines, which dates back more than a century.
An Agreement of Mutual Interest was signed on 1 May 1924 between Benz & Cie (founded 1883 by Karl Benz) and Daimler Motoren Gesellschaft (founded 1890 by Gottlieb Daimler and Wilhelm Maybach).
Both companies continued to manufacture their separate automobile and internal combustion engine brands until, on 28 June 1926, when Benz & Cie. and Daimler Motoren Gesellschaft AG formally merged--becoming Daimler-Benz AG--and agreed that, thereafter, all of the factories would use the brand name of Mercedes-Benz on their automobiles.
In 1998, Daimler-Benz and Chrysler Corporation announced the world's largest cross-border deal ever, valued at US$38billion, and the resulting change in company name to "DaimlerChrysler AG".
In 2007, when the Chrysler group was sold off to Cerberus Capital Management (see below), the name of the parent company was changed to simply "Daimler AG".
In November 2014, Daimler announced it would acquire 25 percent of Italian motorcycle producer MV Agusta for an undisclosed fee.
Timeline of Daimler AG
Benz & Company, 1883-1926
Daimler Motoren Gesellschaft AG, 1890-1926
Daimler-Benz AG, 1926-1998
DaimlerChrysler AG, 1998-2007
Daimler AG, 2007-present
Merger with Chrysler
In a so-called "Merger of Equals," or "Marriage made in Heaven", according to its then CEO and architect Jürgen E. Schrempp, Daimler-Benz AG and United States-based automobile manufacturer Chrysler Corporation, the smallest of the three American automakers, merged in 1998 in an exchange of shares as Daimler-Benz AG bought 92% of Chrysler, and 8% of Chrysler remained independent and formed DaimlerChrysler AG. The terms of the merger allowed Daimler-Benz's non-automotive businesses such as Daimler-Benz InterServices AG, "debis AG" for short, (created in 1989 to handle data processing, financial and insurance services, and real estate management for the Daimler group) to continue to pursue their respective strategies of expansion. debis AG reported revenues of $8.6 bn (DM 15.5 bn) in 1997.
The merger was contentious with investors launching lawsuits over whether the transaction was the 'merger of equals' that senior management claimed or actually amounted to a Daimler-Benz takeover of Chrysler. A class action investor lawsuit was settled in August 2003 for US$300 million while a suit by billionaire investor activist Kirk Kerkorian was dismissed on 7 April 2005. The transaction claimed the job of its architect, Chairman Jürgen E. Schrempp, who resigned at the end of 2005 in response to the fall of the company's share price following the transaction. The merger was also the subject of a book Taken for a Ride: How Daimler-Benz Drove Off With Chrysler, (2000) by Bill Vlasic and Bradley A. Stertz.
Another issue of contention is whether the merger delivered promised synergies and successfully integrated the two businesses. Martin H. Wiggers' concept of a platform strategy like the VW Group, was implemented only for a few models, so the synergy effects in development and production were too low. As late as 2002, DaimlerChrysler appeared to run two independent product lines. Later that year, the company launched products that appeared to integrate elements from both sides of the company, including the Chrysler Crossfire, which was based on the Mercedes SLK platform and utilized Mercedes's 3.2L V6, and the Dodge Sprinter/Freightliner Sprinter, a re-badged Mercedes-Benz Sprinter van.
Sale of Chrysler
Daimler agreed to sell the Chrysler unit to Cerberus Capital Management in May 2007 for US$6 billion. Through most of its history, Chrysler has been the smallest of the "Big 3" U.S. automakers, but in January 2007, DaimlerChrysler, excluding its luxury Mercedes and Maybach lines, also outsold traditionally second place Ford, though behind General Motors and Toyota.
Chrysler reported losses of US$1.5 billion in 2006. It then announced plans to lay off 13,000 employees in mid-February 2007, close a major assembly plant and reduce production at other plants in order to restore profitability by 2008.
DaimlerChrysler had reportedly approached other carmakers and investment groups to sell Chrysler in early 2007. General Motors was reported to be a suitor, but on 3 August 2007, DaimlerChrysler completed the sale of Chrysler Group to Cerberus Capital Management. The original agreement stated that Cerberus would take an 80.1 percent stake in the new company, Chrysler Holding LLC. DaimlerChrysler changed its name to Daimler AG and retained the remaining 19.9% stake in the separated Chrysler.
The terms saw Daimler pay Cerberus US$650 million to take Chrysler and associated liabilities off its hands. Of the US$7.4 billion purchase price, Cerberus Capital Management was to invest US$5 billion in Chrysler Holdings and US$1.05 billion in Chrysler's financial unit. The de-merged Daimler AG received US$1.35 billion directly from Cerberus but directly invested US$2 billion in Chrysler itself.
Since Chrysler's 2009 bankruptcy filing in the United States, Chrysler has been controlled by Italian automaker Fiat and is, (as of 2016), still working to integrate Chrysler's products into the Fiat portfolio, such as Lancia and Chrysler's namesake brand, and Fiat's namesake brand with Dodge. Interestingly, despite the fact it had been nearly a decade since the Daimler/Chrysler split, the fourth-generation Jeep Grand Cherokee shares a platform with the Mercedes-Benz M-Class. This also includes the Chrysler LX platform vehicles which initially used Mercedes-Benz components since its 2005 introduction.
Automated cars
On 3 August 2015, Nokia announced that it had reached a deal to sell its Here digital maps division to a consortium of three German automakers--BMW, Daimler AG, and Volkswagen Group, for EUR2.8 billion. This was seen as an indication that the automakers were interested in automated cars.
Toyota Scion North Charleston Video
Corporate affairs
Management
Dieter Zetsche became the Chairman of Daimler and Head of Mercedes-Benz Cars after 1 January 2006 as well as member of the Board of Management since 1998. He was former President and CEO of the Chrysler, LLC (previously owned by Daimler AG); he may be best known in the United States as "Dr. Z" from a Chrysler advertising campaign called "Ask Dr. Z".
Current (as of 10 February 2017) members of the Board of Management of Daimler AG are:
- Dr. Dieter Zetsche: Chairman of the Board as well as Head of Mercedes-Benz Cars.
- Renata Jungo Brüngger: Integrity and Legal Affairs.
- Ola Källenius: Head of Mercedes-Benz Cars Marketing and Sales.
- Wilfried Porth: Head of Human Resources and Labor Relations.
- Hubertus Troska: Greater China.
- Bodo Uebber: Head of Finance and Controlling as well as Financial Services.
- Dr. Thomas Weber: Head of Group Research and Mercedes-Benz Cars Development.
The board of management total members of seven, after the unexpected resignation on 28 January 2014 of Andreas Renschler, former head of Manufacturing and Procurement Mercedes-Benz Cars & Mercedes-Benz Vans, had been brought back to eight after the nomination on 1 January 2015 of Swedish-born Ola Källenius to the board of management as head of Mercedes-Benz Cars Marketing and Sales. After the sudden departure of Wolfgang Bernhard in February 2017, that number returned to seven.
As of May 2015, the twenty members of Daimler AG's supervisory board are: Manfred Bischoff (Chairman), Michael Brecht (Deputy Chairman), Paul Achleitner, Sari Baldauf, Michael Bettag, Bernd Bohr, Clemens Börsig, Jürgen Hambrecht, Petraea Heynike, Andrea Jung, Joe Kaeser, Ergun Lümali, Sabine Maaßen, Wolfgang Nieke, Bernd Pischetsrieder, Valter Sanches, Jörg Spies, Elke Tönjes-Werner, Frank Weber, Roman Zitzelsberger.
by ownership
- Institutional investors: 70.6%
- Private investors: 19.5
- Kuwait Investment Authority (Kuwait): 6.8%
- Renault (France): 1.54%
- Nissan (Japan): 1.54%
by region 29.2% Europe (excluding Germany), 36.4% German, 24.3% United States, 6.8% Kuwait, 2.9% Asia, 0.4% Others.
As of March 2010, Daimler owned a 22.5% share of EADS, of which the public sector held 40%.
In April 2013, Daimler sold its shares in EADS, and the same year, EADS restructured itself into a new aerospace company named Airbus, into which Daimler AG has no shareholding.
On the side of the public sector, the KfW banking group holds 13%, HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsverwaltung (State of Hamburg) holds 10%, Hannoversche Beteiligungsgesellschaft (State of Lower Saxony) holds 5%, Bayerische Landesbodenkreditanstalt, Anstalt der Bayerischen Landesbank holds 3.5%, LfA Förderbank Bayern holds 1.5%, Landesbank Baden-Württemberg and Landeskreditbank Baden-Württemberg - Förderbank (L-Bank) each holds 2.5%, and Bremer Investitions-Gesellschaft (State of Bremen) holds 2%.
Leadership
Daimler-Benz AG (1926-1998)
- Wilhelm Kissel (1926-1942)
- Wilhelm Haspel (1942-1952)
- Heinrich C. Wagner (1952)
- Fritz Koenecke (1952-1960)
- Walter Hitzinger (1961-1966)
- Joachim Zahn (1966-1979)
- Gerhard Prinz (1980-1983)
- Werner Breitschwerdt (1983-1987)
- Edzard Reuter (1987-1995)
- Jürgen E. Schrempp (1995-1998)
DaimlerChrysler AG (1998-2007)
- Jürgen E. Schrempp (1998-2006)
- Robert James Eaton (co-CEO, 1998-2000)
- Dieter Zetsche (2006-2007)
Daimler AG (2007-present)
- Dieter Zetsche (2007-present)
North Charleston expansion
On 5 March 2015, Daimler AG announced a 1,200-job package to the North Charleston region for its van plant, to allow the company to start manufacturing Mercedes-Benz Sprinter vans from scratch in a North Charleston plant to meet demand in North America. Currently, these vans are set up in Germany, then shipped to the United States partially disassembled for reassembly to avoid import tariffs, a practice that started in 2010. A Daimler official said that the Sprinter's popularity in North America is making that process less efficient. The North Charleston plant had been employing only 100 workers. The Sprinter is available on the U.S. market as a panel van, crew bus and chassis in several variants with three lengths and roof heights, six-cylinder diesel or gasoline engines. The Sprinter has been assembled and sold in the United States since 2001.
Brands
Daimler sells automobiles under the following brands worldwide:
- Mercedes-Benz Cars
- Maybach - production ended in 2012
- Mercedes-Benz
- Mercedes-AMG
- Smart
- Car2Go
- Daimler Trucks
- Commercial vehicles
- Freightliner
- Mercedes-Benz (truck group)
- Mitsubishi Fuso
- Thomas Built Buses
- Sterling Trucks - operations wound down in 2010, but will continue to support authorized dealers and vehicle owners
- Western Star
- BharatBenz
- Components
- Alliance Truck Parts
- Detroit Diesel
- Commercial vehicles
- Daimler Buses
- Mercedes-Benz buses
- Orion Bus Industries - operations winded down in 2012, and closed in 2013
- Setra
- Mercedes-Benz Vans
- Mercedes-Benz (vans group)
- Daimler Financial Services
- Mercedes-Benz Bank
- Mercedes-Benz Financial
- Daimler Truck Financial
- Others
- Mercedes AMG High Performance Powertrains (Builds engines for Formula 1 Racing)
Locations
The Daimler AG has a worldwide networks of production plants and research centers. The following list is a description of all locations worldwide, that include a Daimler plant, including plants for Daimler subsidiaries EvoBus, Daimler Trucks North America, Detroit Diesel, Freightliner Trucks and Mitsubishi Fuso Truck and Bus Corporation. The list excludes the location of Daimler Financial Services locations.
Holdings
Daimler currently holds interests in the following companies:
- 89.29% Mitsubishi Fuso Truck and Bus Corporation of Japan
- 50.1% Automotive Fuel Cell Cooperation of Canada
- 50% Engine Holding Rolls Royce holds the other 50%
- 50% Denza (Shenzhen BYD Daimler New Technology Co., Ltd)
- 25% MV Agusta of Italy
- 12% Beijing Automotive Group (BAIC)
- 11% KAMAZ of Russia
- 5% Aston Martin
At the end of 2011 McLaren Group completely bought back the stocks from Daimler.
17 April 2013, Daimler AG exits EADS, the parent company of Airbus of Europe.
Joint ventures and alliances
Beijing Automotive Group
In February 2013, Daimler acquired a 12% stake in Beijing Automotive Industry Holding Co Ltd (BAIC), becoming the first western car manufacturer to own a stake in a Chinese company.
Daimler works with China's Beiqi Foton (a subsidiary of BAIC) to build Auman trucks.
Denza
In 2010 BYD Auto and Daimler AG created a new joint venture Shenzhen BYD Daimler New Technology Co., Ltd. In 2012 the new brand Denza was launched by the joint venture to specialise in electric cars.
Fujian Benz
In 2007 Daimler created a joint venture with Fujian Motors Group and China Motor Corporation and created Fujian Benz (originally Fujian Daimler Automotive Co.).
Renault-Nissan and Daimler Alliance
On 7 April 2010, Renault-Nissan executives, Carlos Ghosn and Dr. Dieter Zetsche announced a partnership between the three companies. The first fruits of the alliance in 2012 included engine sharing (Infiniti Q50 utilising Mercedes diesel engines) and a re-badged Renault Kangoo being sold as a Mercedes-Benz Citan.
Alternative propulsion
Biofuel research
Daimler AG is involved in a joint project with Archer Daniels Midland Company and Bayer CropScience to develop the semi-evergreen shrub jatropha curcas as a biofuel.
Electric
Daimler AG and the utility company RWE AG were set in 2009 to begin a joint electric car and charging station test project in the German capital, Berlin, called "E-Mobility Berlin".
Following trials in 2007 and then with Tesla in 2009, Daimler is building a production Smart electric drive car using Tesla's battery technology. Daimler temporarily invested in Tesla, saving it from bankruptcy. Daimler's joint venture with BYD has resulted in the creation of the new brand Denza.
In 2016, Daimler subsidiary ACCUMOTIVE announced their stationary batteries, to store up to 20 kWh of solar power for later use. Daimler plans to invest EUR1.5 billion in battery technology, and unveiled a factory in Kamenz in May 2017.
Fuel cell
Daimler has been involved with fuel cell vehicle development for some time, with a number of research and concept vehicles shown and demonstrated, the first being the 2002 Mercedes-Benz F-Cell car and the Mercedes-Benz Citaro hydrogen bus. In 2013, the Renault-Nissan/Daimler alliance was joined by Ford to further develop the fuel cell technology with an aim for production by 2017.
Hybrid
Mercedes-Benz launched its first passenger car model equipped with a hybrid drive system in summer 2009, the Mercedes-Benz S-Class 400 Hybrid. and the Citaro Hybrid bus in 2007. Daimler Trucks and Mitusbishi Fuso have also trailed various hybrid models including the Mitsubishi Fuso Canter Eco Hybrid and Mitsubishi Fuso Aero Star Aero Star Eco Hybrid bus.
Formula One
On 16 November 2009, Daimler (45.1%) och Aabar Investments (30%) purchased a 75.1% stake in Brawn GP. The company was rebranded as Mercedes GP with its base in Brackley, UK, with Ross Brawn remaining team principal., However, the purchase of Brawn meant that Daimler sold back its stake in McLaren in stages that ended in 2011. Mercedes continued to provide sponsorship and engines to McLaren until 2015, after which McLaren switched to engines from Honda.
Prior to the 2011 season, Daimler and Aabar Investments purchased the remaining 24.9% stake owned by the team management in February 2011. In November 2012 Aabar Investments sold its remaining shares and the team (rebranded as Mercedes AMG Petronas F1 Team) is now wholly owned by Daimler.
Daimler also owns Mercedes AMG High Performance Powertrains, which as of 2017, supplies engines to Force India and Williams, in addition to Mercedes AMG Petronas.
Bribery and corruption
On 1 April 2010, Daimler AG's German and Russian subsidiaries each pleaded guilty to two counts of bribery charges brought by the U.S. Justice Department and the U.S. Securities and Exchange Commission. Daimler itself had to pay US$185 million as a settlement, but the company and its Chinese subsidiary remained subject to a two-year deferred prosecution agreement requiring further cooperation with regulators, adherence to internal controls and meeting other terms before final sentencing. Daimler would face harsher penalties should it fail to meet the terms of the agreement during the two-year period.
Additionally, Louis J. Freeh, a former director of the Federal Bureau of Investigation, served as an independent monitor to oversee Daimler's compliance with anti-bribery laws.
U.S. prosecutors accused key executives of Daimler, Daimler subsidiaries, and Daimler affiliates of illegally showering foreign officials with money and gifts between 1998 and 2008 to secure government contracts around the world. The investigation for the case revealed that Daimler improperly paid some $56 million in bribes related to more than 200 transactions in at least 22 countries (including China, Russia, Turkey, Hungary, Greece, Latvia, Serbia and Montenegro, Egypt and Nigeria, among other places) that, in return, awarded the company $1.9 billion in revenue and at least $91.4 million in illegal profits.
The SEC case was sparked in 2004 after David Bazzetta, a former auditor at then DaimlerChrysler Corp, filed a whistleblower complaint after he was fired for raising questions about bank accounts controlled by Mercedes-Benz units in South America. Bazzetta alleged that he learned in a July 2001 corporate audit executive committee meeting in Stuttgart that business units "continued to maintain secret bank accounts to bribe foreign government officials", though the company knew the practice violated U.S. laws.
In another attempt to silence Bazzetta, Daimler later offered to settle his termination of employment suit out of court and he eventually accepted a settlement. But Daimler's strategy with Bazzetta proved to be a failure as the U.S. criminal investigation for violating anti-bribery laws was already underway in what has been one of the most wide-ranging cases brought against a foreign corporation.
According to the charges, the bribes were frequently made by over-invoicing customers and paying the excess back to top government officials or their proxies. The bribes also took the form of luxury European vacations, armored Mercedes vehicles for high-ranking government officials and a birthday gift to the then notorious dictator of Turkmenistan, Turkmenbashi (Saparmurat Niyazov), including a golden box and 10,000 copies of his personal manifesto, Ruhnama, translated into German.
Investigators also found that the firm violated the terms of the United Nations' Oil-for-Food Programme with Iraq by giving kickbacks worth 10% of the contract values to officials within the Iraqi government, then led by Saddam Hussein. The SEC said the company made more than $4 million in profit from the sale of vehicles and spare parts in the corrupt oil-for-food deals.
U.S. prosecutors further alleged that some bribes were paid through shell companies based in the U.S. "In some cases Daimler wired these improper payments to U.S. bank accounts or to the foreign bank accounts of U.S. shell companies in order to transmit the bribe", the court papers said.
Prosecutors said that Daimler engaged in a "long-standing practice" of paying bribes, due in part to a corporate culture that encouraged the practice.
"Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies [Daimler AG, its subsidiaries and affiliates] saw foreign bribery as a way of doing business," said Mythili Raman, a principal deputy in the Justice Department's criminal division.
"It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice", Robert Khuzami, director of the SEC's enforcement division, said in a statement.
"We have learned a lot from past experience," Dieter Zetsche, chairman of Daimler's board, said in a statement.
As per the agreement with prosecutors, the two Daimler subsidiaries admitted to knowingly violating the Foreign Corrupt Practices Act, which bars companies and their officials from paying bribes to foreign officials to win business. The Foreign Corrupt Practices Act applies to any company that lists its shares on U.S. stock exchanges. Daimler AG was listed with the symbol "DAI" on the New York Stock Exchange, giving the Justice Department jurisdiction over the German car maker's payments in countries around the globe.
Judge Richard J. Leon of the United States District Court in Washington, D.C., approved the plea agreement and settlement, calling it a "just resolution".
The primary case is USA v. Daimler AG, United States District Court for the District of Columbia, No. 1:10-cr-00063-RJL .
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