Dieter Zetsche
It is becoming increasingly clear how much the manager has let the reins slip over the past few years of his 13-year reign as Daimler boss.
The timing was perfect. On September 26, 2018, the former Daimler-Boss Dieter Zetsche and his supervisor Manfred Bischoff put their master plan into practice. First, the shareholders were informed of the intended succession at the carmaker by ad hoc announcement, then the almost 300,000 employees. “Daimler is setting the course for the future,” read the mandatory message, in which the power structure at the Stuttgart-based Dax group would be reorganized at an early stage.
Zetsches Crown Prince, the Swede Ola Källenius, was officially appointed CEO of Daimler appointed. In addition, the company’s 20 supervisory boards explained their intention to Zetsche after a two-year cooling-off period to the shareholders at the general meeting to propose as a supervisory board. Chairman of the Supervisory Board Bischoff even announced that Zetsche would be in 2021 to recommend as his successor,
“Dieter Zetsche is predestined to carefully and successfully manage the company’s supervisory board,” enthused Bischoff. With the appointment of the manager as head of the control council “we ensure continuity for the sustainable success of Daimler AG,” said Bischoff. What seemed right at the time must be regarded as wrong and downright negligent with today’s knowledge.
Finally, Daimler had to go on Wednesday de facto the third profit warning since Zetsche’s departure as CEO in May 2019. Once again, the group warns its shareholders of new billions in the diesel scandal.
The Group’s profit more than halved in 2019 – after the result had already plummeted by almost 30 percent in 2018. The prospects are poor, Daimler is far from its own claim of “the best or nothing”.
One of the main responsible for the plight is Zetsche. The 66-year-old now has the chance to do the troubled company and himself a big favor and avert further damage. To do this, Zetsche has to prove his greatness again and voluntarily refrain from the plan to become chief controller of the car company in 2021. Otherwise there is a risk of an uprising of several shareholders, including requests for special audits, regarding his role in the exhaust gas affair.
“We generally adhere to the legal requirements and have not tampered with our vehicles,” said Zetsche in September 2015 clearly. No “defeat device” would be used at Mercedes. Many investors now feel deceived by such statements from Zetsche.
It is still unclear whether Mercedes only tricked borderline or actually operated with illegal means. Either way, the image of the brand with the star is scratched, the forced recall of more than one million diesel vehicles in Europe and an 870 million euro fine from the Stuttgart public prosecutor also weigh on the balance sheet.
A conflicting balance
Daimler had already set aside 1.6 billion euros for expenses in the diesel scandal in the summer of 2019, and now up to 1.5 billion euros could be added. The cause develops into a bottomless pit. And it is far from being the only poisoned legacy from the Zetsche era.
The manager with the distinctive mustache was and is an exception. There is no doubt about that. Daimler has Zetsche after the Chrysler-Debakel saved and Mercedes catapulted back to the top. He was the figurehead of cultural change, decreed more self-irony for Stuttgart’s once-serious beer. Under Zetsche, Daimler became younger, more feminine and more successful than ever in terms of sales and sales. His lifetime achievement is indisputable.
At the same time, however, it is becoming increasingly clear how much Zetsche let the reins slide in the last years of his 13-year reign as Daimler boss. He completely overslept the shift towards electromobility.
Mercedes’ carbon footprint is disastrous. As the only German vehicle manufacturer, Daimler threatens to miss the EU’s climate requirements. In addition to high fines, there is a further loss of reputation. He also left his successor Källenius with high pension obligations.
Because of this ambiguous balance sheet, Zetsche is not “predestined” to move into the Daimler Supervisory Board. The change from the board to the control board should be an exception anyway and should only be done for candidates who are beyond any doubt. This is not the case with Zetsche.
Different to BMW or VW Daimler also lacks a protective anchor shareholder who could push a candidate like Zetsche through. Rather, investors like Union Invest strictly refuse to return. Daimler now needs a clear cut with the past. The incumbent supervisory board chairman, Bischoff, should soon look for another candidate to succeed him.