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23 May, 2019 00:00 00 AM
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Daimler offers wheel to new CEO amid tricky gear change

AFP, Berlin
Daimler offers wheel to new CEO amid tricky gear change
Dieter Zetsche, outgoing CEO of German car maker Daimler, addresses shareholders during Daimler's annual general meeting in Berlin yesterday. Daimler boss Dieter Zetsche, 66, bows out after 13 years on with his Swedish successor Ola Kallenius needing to tackle problems brewing under the bonnet of the Mercedes-Benz maker. AFP Photo

Flamboyant Daimler boss Dieter Zetsche was set bow out after 13 years yesterday, leaving successor Ola Kallenius to tackle problems brewing under the bonnet of the Mercedes-Benz maker.

Zetsche, 66, is credited with saving Daimler, skillfully managing the 2007 divorce from Chrysler, but his successor faces challenges as the German car industry struggles to convert to electric vehicles.

Kallenius, previously head of research and responsible for the switch to electric, officially replaces Zetsche at the end of Wednesday's annual general meeting in Berlin.

Zetsche's departure marks the end of an era, as the 49-year-old Swede becomes Daimler's first foreign CEO in over five decades.

"Without Mr. Zetsche, Daimler would no longer exist," Ferdinand Dudenhoeffer, head of Germany's Center for Automotive Research, told the news agency. "He saved them from insolvency."

Along with his bristling whiskers, Zetsche's breaks with the staid codes of corporate Germany -- often making public appearances in jeans and Converse sneakers -- have made him a household name.

Newcomer Kallenius has a more low-key approach, favouring suits and smart shoes rather than trainers.

But he will have to hit the ground running as Zetsche leaves him several issues to clean up.

Sales figures worldwide are lagging behind record years, with net profits at the Stuttgart-based group tumbling 29 percent to 7.6 billion euros ($8.7 billion) last year.

"We cannot and will not be satisfied with the current level of profitability," Zetsche said in his parting speech Wednesday.

Earnings were sapped by massive investments in developing new models and new technologies like electric and autonomous vehicles.

The 'dieselgate' scandal must also be cleaned up.

Last year, Daimler had to recall hundreds of thousands of vehicles because of alleged illegal emissions manipulation, and faces ongoing legal proceedings.

Having announced Zetsche's departure last September, there has been a carefully co-ordinated change of the guard over the last eight months as he gradually handed over responsibilities behind the scenes.

If Zetsche's era stood for diesel engines, Kallenius needs to manage the switch to electric-powered vehicles.

Mercedes presented its first all-electric EQ brand SUV in Stockholm last September.

But harder decisions are on the horizon, with details needed on a cost-cutting programme that could see thousands of jobs slashed, as at fellow German giants Volkswagen and BMW.

"We have to cut costs and increase the efficiency throughout the company," Zetsche urged.

Meanwhile shareholders will be asked to vote on Daimler's reorganisation into a holding company with more autonomy for its three divisions: cars and vans, trucks and buses, and financial and digital services.

Zetsche "has laid a lot of groundwork," industry expert Dudenhoeffer said, meaning that in many areas, "now they just have to accelerate".

"Swedes can do more than sell good-looking furniture. We can also do more than produce Swedish meatballs and ABBA -- just to clear up the next clichés," Kallenius wrote in a company blog just prior to his appointment.

Industry observers say Kallenius has already made his first key move, sealing a joint venture with auto giant Geely to build the next generation of Smart cars in China.

Unlike Zetsche, Kallenius is not considered a fan of the mini two-seaters, nicknamed the 'Bonsai-Benz', and will have to decide how closely Daimler will co-operate with major shareholder Geely.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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