Daimler reorganises business as threats mount up

24 February 2020

Daimler is redeveloping its organisational structure in the wake of increased pressure to invest in its electrification and digitalisation programmes.

The carmaker’s goal is to improve the development and production processes of vehicles through closer and more efficient cooperation. Daimler recently announced a swathe of job cuts, including managerial positions, due to the need for increased investment in these fields.

As part of the Ambition2039 sustainability offensive, Mercedes-Benz AG plans to make its entire new car product portfolio CO2-neutral – a goal for which the company is pooling all its strengths and resources. Shorter reporting lines in the new structure will help in this effort.

′At Daimler, we are working hard to achieve our major strategic goals: The gradual switch to CO2-neutral mobility and the full use of digitalisation for products and processes’ said chairman Ola Källenius. ′The transformation of the automotive industry is a great opportunity to further develop our successful business model. That is why we are setting up processes and management structures for the future.’

New positions

Product Strategy and Steering will be consolidated and promoted to be more customer-centric. Wolf-Dieter Kurz will take on this new position. He is responsible for the business cases of product projects and will report directly to the CEO of Mercedes-Benz AG. In addition, on the Board of Management of Daimler AG, Ola Källenius will also be responsible for the Mercedes-Benz Vans division.

The company is also introducing the new function of Chief Operating Officer (COO). Markus Schäfer, currently responsible for group research and Mercedes-Benz Cars development, procurement and supplier quality, will take on the role. Schäfer will holistically control all business processes over the entire life cycle of a product and, in addition to his current duties on the Board of Daimler AG, will be responsible for the production of Mercedes-Benz cars. These areas will thereby be consolidated within the board of management of Daimler AG and managed from a single source, the carmaker said.

Risks ahead

Daimler had a turbulent 2019, and judging by its annual report, is not expecting an easy ride this year. Along with declining sales, the carmaker is also concerned over further diesel emissions cheating fines and the impact of the global coronavirus outbreak.

′Risks for the Daimler Group may not only affect the development of unit sales but may also lead to significant adverse effects on production, the procurement market and the supply chain,’ the Stuttgart-based company said.

It also noted that the epidemic posed a risk for economic growth in China, other Asian countries and worldwide.

The report suggested that Germany’s motor authority, the KBA, will rule that other vehicles made by the brand were also ′equipped with impermissible defeat devices.’

Daimler has temporarily halted delivery and registration of some models, according to the report. It boosted total provisions to €30.7 billion from €23 billion, with potential liability and regulatory costs more than doubling to €4.9 billion, as it faces a lawsuit from its investors over the diesel irregularities.

Its supervisory board also created a six-member special committee to focus on legal affairs ′against the backdrop of the complexity of the emissions- and antitrust-related proceedings.’