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Mercedes-Benz Group

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This article is about the German automobile manufacturer. For the British automobile manufacturer, see Daimler Company.
Daimler AG
Company typeAktiengesellschaft
FWB: DAI
ISINDE0007100000 Edit this on Wikidata
IndustryAutomotive
PredecessorDaimler-Benz
Founded1998
HeadquartersStuttgart, Germany
Area served
Worldwide
Key people
Dieter Zetsche (CEO and Chairman of the management board), Manfred Bischoff (Chairman of the supervisory board)
ProductsAutomobiles, commercial vehicles (list of brands...)
Revenue€106.54 billion (2011)[1]
€8.755 billion (2011)[1]
€5.667 billion (2011)[1]
Total assets€148.132 billion (2011)[1]
Total equity€41.34 billion (2011)[1]
OwnerInstitutional shareholders (69.1%)
Private shareholders (20.2%)
Kuwait Investment Authority (7.6%)
Renault-Nissan Alliance (3.1%)[1]
Number of employees
267,274 (2011)[1]
DivisionsMercedes-Benz
Mercedes-AMG
Smart
Subsidiaries
List
Websitedaimler.com

Daimler AGⓘ (German pronunciation: [ˈdaɪmlɐ aːˈɡeː]; formerly DaimlerChrysler) is a German multinational automotive corporation. Daimler AG is headquartered in Stuttgart, Baden-Württemberg, Germany. By unit sales, it is the thirteenth-largest car manufacturer and second-largest truck manufacturer in the world. In addition to automobiles, Daimler manufactures buses and provides financial services through its Daimler Financial Services arm.

As of 2013, Daimler owns or has shares in a number of car, bus and truck marques including Mercedes-Benz, Mercedes-AMG, Smart, Freightliner, Western Star, Thomas Built Buses, Setra, BharatBenz, Mitsubishi Fuso, as well as shares in Denza, KAMAZ, Renault-Nissan Alliance, and aerospace group EADS. At the end of 2012, the company closed the Maybach marque.

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) of Karl Benz and Daimler Motoren Gesellschaft (founded 1890) of 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,[2] 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[note 1] of the parent company was changed to simply "Daimler AG".

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

The former logo of Daimler Chrysler AG.

In a so-called "Merger Of Equals" Daimler-Benz AG and the American automobile manufacturer Chrysler Corporation merged in 1998 in an exchange of shares as Daimler-Benz AG bought 92% of Chrysler,[3] and formed DaimlerChrysler AG. The terms of the merger allowed Daimler-Benz's non-automotive businesses such as Daimler-Benz InterServices AG (Debis) (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 reported revenues of $ 8.6 bn (DM 15.5 bn) in 1997.[4][5]

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 April 7, 2005.[6] 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.[7]

Another issue of contention is whether the merger delivered promised synergies and successfully integrated the two businesses. As late as 2002, DaimlerChrysler appeared to run two independent product lines. Later that year, the company launched products that appear 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

Chrysler had suffered a series of setbacks in recent years, culminating in Daimler's agreement to sell the unit to Cerberus Capital Management in May 2007 for US$6 billion. Through most of its history, Chrysler has been the third largest 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.

In the middle of the past decade, the merger began to take a turn for the worse. Due to Daimler's reluctance to allow Chrysler to continue development and use quality materials[dubious – discuss], Chrysler vehicles suffered lower fit and finish quality as well as sub-standard parts being supplied and used in spite of concerns[citation needed]. Although the resulting vehicles produced were still adequate, they were generally not on par with the competition.

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.[8]

DaimlerChrysler had reportedly approached other carmakers and investment groups to sell Chrysler in early 2007. General Motors was reported to be a suitor,[9] but on August 3, 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.[10]

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 will 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 plans to integrate Chrysler's products into the Fiat portfolio, most notably Lancia and Chrysler's namesake brand. Despite the fact it had been nearly four years after the Daimler/Chrysler split, the fourth-generation Jeep Grand Cherokee shares a platform with the Mercedes-Benz M-Class.[11]

Corporate affairs

Management

Dr. Dieter Zetsche has been the Chairman of Daimler and Head of Mercedes-Benz Cars since January 1, 2006 as well as member of 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 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.
  • Dr. Wolfgang Bernhard: Head of Daimler Trucks.
  • Wilfried Porth: Head of Human Resources and Labor Relations.
  • Andreas Renschler: Head of Mercedes-Benz Cars Procurement and Production.
  • Bodo Uebber: Head of Finance and Controlling as well as Financial Services.
  • Dr. Thomas Weber: Head of Group Research and Mercedes-Benz Cars Development.

Current members of the Supervisory Board of Daimler AG are: Heinrich Flegel, Juergen Hambrecht, Thomas Klebe, Erich Klemm, Arnaud Lagardère, Jürgen Langer, Helmut Lense, Sari Baldauf, William Owens, Ansgar Osseforth, Valter Sanches, Manfred Schneider, Stefan Schwaab, Bernhard Walter, Lynton Wilson, Mark Wössner, Manfred Bischoff, Clemens Börsig and Uwe Werner. Dr Manfred Bischoff serves as the Chairman of the Supervisory Board of Daimler AG and Erich Klemm as Vice-Chairman.[12]

Shareholder profile

by Ownership[13]

by Region[13] 35.9% Europe (excluding Germany), 33.3% German, 19.5% United States, 7.6% Kuwait, 3.3% Asia, 0.4% Others.

Brands

Daimler sells automobiles under the following marques worldwide:

  • Mercedes-Benz Vans
    • Mercedes-Benz (vans group)

Holdings

Daimler currently holds interests in the following companies:

At the end of 2011 McLaren Group completely bought back the stocks from Daimler.

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.[17]

Daimler works with China's Beiqi Foton (a subsidiary of BAIC) to build Auman trucks.[18]

Denza

In 2010 BYD Auto and Daimler AG created a new joint venture Shenzhen BYD Daimler New Technology Co., Ltd. In 2012 a the new marque 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 April 7, 2010 Renault-Nissan executives, Carlos Ghosn and Dr. Dieter Zetsche announced a partnership between the three companies.[19] The first fruits of the alliance in 2012 included engine sharing (Infiniti Q50 utilising Mercedes diesel engines)[20] and a re-badged Renault Kangoo being sold as a Mercedes-Benz Citan.[21]

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.[22]

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".[23][24]

Following trials in 2007 and then with Tesla in 2009,[25] Daimler is building a production Smart electric drive car using Tesla's battery technology.[26]

Daimler's joint venture with BYD[27] has resulted in the creation of the new marque Denza.

Fuel cell

Daimler has been involved with fuel cell 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.[28][29]

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.[24] 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

Main article: Mercedes-Benz in Formula One

On November 16, 2009 Daimler purchased a 75.1% stake in Brawn GP. The company was rebranded as Mercedes GP. Ross Brawn will remain team principal and the team will be based in Brackley, UK. However the purchase of Brawn meant that Daimler back its stake in McLaren in stages that ended in 2011. Mercedes will continue to provide sponsorship and engines to McLaren until 2015. Mercedes owns 45.1% of the new company with 30% for Aabar Investments and 24.9% for Ross Brawn. The racing team has signed the former champion Lewis Hamilton as a replacement to Michael Schumacher who retired at the end of 2012.

Bribery and corruption

On April 1, 2010, Daimler AG's German and Russian subsidiaries each plead guilty to two counts of bribery charges brought by the U.S. Justice Department and the U.S. Securities and Exchange Commission. Daimler itself will pay US$185 million as a settlement, but the company and its Chinese subsidiary remain subject to a two-year deferred prosecution agreement which requires further cooperation with regulators, adherence to internal controls and meeting other terms before they are required to return to the court room. Daimler will face harsher penalties if the company fails 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, will serve 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.[30]

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.[31] 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 is 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.[32][33]

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.[30]

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.[34]

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.[35]

"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.[36]

"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.[37] 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 NYSE, giving the Justice Department jurisdiction over the German car maker's payments in countries around the globe.

Judge Richard J. Leon of 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. 10-00063.[38]

Notes

  1. ^ Press release by Tata Group Jaguar now shares the rights to the Daimler name with Daimler AG, the German car manufacturer created when DaimlerChrysler was split up. Jaguar agreed terms in 2007 which allow the German company to use the Daimler brand as the title of a trading company, a trade name or a corporate name — rights that it did not hold previously. The renegotiated terms did not affect Jaguar's rights to build Daimler cars. A spokesman for Jaguar said: “The extended usage agreement does not affect either company's existing right to use the Daimler name for a product.” — The Times 28 July 2008.

References

  1. ^ a b c d e f g "Annual Report 2011" (PDF). Daimler. Retrieved 29 March 2012.
  2. ^ "DaimlerChrysler dawns". CNN Money. 7 May 1998. Retrieved 12 April 2013.
  3. ^ "COMPANY NEWS; DAIMLER-BENZ AND CHRYSLER REVISE RATIO FOR STOCK SWAP". The New York Times. 9 June 1998. Retrieved 2011-10-07.
  4. ^ "Daimler-Benz and Chrysler merge". 7 May 1998. Retrieved 27 January 2011.
  5. ^ "DaimlerChrysler AG - The History of Daimler-Benz AG". Retrieved 27 January 2011.
  6. ^ "DaimlerChrysler settles investor lawsuit". CarAndDriver.com. 25 August 2003. Retrieved 2007-07-23.
  7. ^ "Taken for a Ride". BusinessWeek. 5 June 2000. Retrieved 2007-11-06.
  8. ^ "Chrysler Announces Major Downsizing - Daily Auto Insider". CarAndDriver.com. 15 February 2007. Retrieved 2007-03-15.
  9. ^ Healey, James (13 October 2008). "GM and Chrysler consider merger". USA Today. Retrieved 11 April 2013.
  10. ^ "Home - Cerberus Takes Over Majority Interest in Chrysler Group and Related Financial Services Business for EUR 5.5 Billion ($7.4 billion) from DaimlerChrysler". Daimler. Retrieved 2010-09-27.
  11. ^ "2011 Jeep Grand Cherokee First Drive". Motor Trend. 2007-02-26. Retrieved 2010-09-27.
  12. ^ "Home - Konzernprofil - Corporate Governance - Organe - Aufsichtsrat". Daimler. Retrieved 2010-09-27.
  13. ^ a b "Daimler Investor Relations". Retrieved January 2013. {{cite web}}: Check date values in: |accessdate= (help)
  14. ^ "At Last, the Maybach Is Priceless". New York Times. 16 August 2012. Retrieved 1 February 2013.
  15. ^ "EADS shares soar as Daimler nets $2 billion from stake sale". Reuters. 6 December 2012. Retrieved 28 January 2013.
  16. ^ "Aabar pulls out of Daimler investment in Tesla". Reuters. 27 June 2012. Retrieved 28 January 2013.
  17. ^ Bryant, Chris (1 February 2013). "Daimler takes stake in Chinese carmaker". FInancial Times. Retrieved 11 April 2013.
  18. ^ "Foton and Daimler in Truck Joint Venture". ChinaAutoWeb.com. Retrieved 2010-07-26.
  19. ^ Moffett, Sebastian (7 April 2010). "Daimler, Nissan, Renault Set Small-Car Cooperation". Wall Street Journal. Retrieved 2010-04-07.
  20. ^ "Mercedes engines for new Infiniti Q50". MSN Autos. 7 February 2013. Retrieved 11 April 2013.
  21. ^ "Mercedes-Benz Citan (2013 - )". Honest John. 18 march 2013. Retrieved 11 April 2013. {{cite web}}: Check date values in: |date= (help)
  22. ^ "Archer Daniels Midland Company, Bayer CropScience and Daimler to Cooperate in Jatropha Biodiesel Project". DaimlerChrysler.
  23. ^ [1][dead link]
  24. ^ a b "Newsroom | Daimler > Sustainability". Daimler. Retrieved 2009-05-01. [dead link]
  25. ^ KRAEMER, Susan (9 August 2009). "Smart EV Tries Tesla Batteries in Next U.K.Trial". Gas 2. Retrieved 11 April 2013.
  26. ^ SQUATRIGLIA, Chuck (13 January 2009). "Tesla Motors Joins Daimler On a Smart EV". Wired. Retrieved 11 April 2013.
  27. ^ "BYD and Daimler in EV Joint Venture". ChinaAutoWeb.com. Retrieved 2010-07-26.
  28. ^ Ingram, Antony (28 January 2013). "Daimler, Ford, Nissan Agree To Share Hydrogen Fuel-Cell Costs For 2017 Or Later". Washington Post. Retrieved 11 April 2013.
  29. ^ "Ford, Renault-Nissan and Daimler agree fuel cell deal". BBC News. 28 January 2013. Retrieved 11 April 2013.
  30. ^ a b Jeremy Pelofsky (2010-04-01). "U.S. judge OKs settlement in Daimler bribery case". Reuters. Retrieved 2010-04-03.
  31. ^ Fuhrmans, Vanessa (2010-03-24). "Daimler Agrees to Pay $185 Million to Settle U.S. Bribery Investigation - WSJ.com". Online.wsj.com. Retrieved 2010-04-03.
  32. ^ Matthias Brüggmann: Der bizarrste Diktator der Welt ist tot. Handelsblatt, 21. Dezember 2006
  33. ^ Gesellschaft für bedrohte Völker: Ruhnama - Im Schatten des Heiligen Buches. Die Menschenrechtslage in Turkmenistan
  34. ^ Julia Kollewe (2010-03-24). "Daimler 'agrees $185m fine' to settle US corruption investigation | Business". London: The Guardian. Retrieved 2010-04-03.
  35. ^ By Reuters (2010-03-24). "Daimler's Settlement in Bribery Case Is Approved". NYTimes.com. Retrieved 2010-04-03. {{cite news}}: |author= has generic name (help)
  36. ^ "UPDATE: US Judge Approves Settlement In Daimler Bribery Case". FOXBusiness.com. 2006-10-01. Retrieved 2010-04-03. [dead link]
  37. ^ "AG Reaches Settlement with U.S. Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ) | Daimler > Company > News". Daimler. 2010-04-01. Retrieved 2010-09-27.
  38. ^ Thursday (2010-04-01). "The Daimler Settlement at the FCPA Blog with links to documents of the case". Fcpablog.com. Retrieved 2010-09-27.
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