The CFO of Mercedes-Benz AG, Frank Lindenberg, will leave Daimler and on 31 March 2020 under a sweeping reorganization announced this week in Stuttgart. It’s just the latest example of the changes that are being made industry-wide as old-line automakers confront the capital and profit destroying aspects of the rapidly emergence of 21st century autonomous and connected vehicles.
Compounding the problem is that governments will now dictate the designs of vehicles. As part of the so-called Ambition 2039 sustainability offensive, Mercedes-Benz AG plans to make its entire new car product portfolio CO2-neutral. Shorter reporting lines in the new structure will help in this effort, it’s hoped. (BMW Group and Daimler Mobility Hoping to Profit on Joint Ventures. Monetizing a Monopoly or a Joint Survival Bid?, Capital Punishment Day for Auto Workers at Daimler)
The earnings decline has already begun.
In 2018, the Group sold 3.4 million vehicles and employed a workforce of around 298,700 people. Group revenue amounted to €167.4 billion. Group EBIT amounted to €11.1 billion.
“We are positioning the company for the transformation with a clear strategy for the future. The expenditure needed to achieve the CO2 targets require comprehensive measures to increase efficiency in all areas of our company. This also includes streamlining our processes and structures,” said Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG late last year.
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“This will have a negative impact on our earnings in 2020 and 2021. To remain successful in the future, we must therefore act now and significantly increase our financial strength,” said Källenius.
The many changes will take effect on April 1, 2020. Harald Wilhelm, Member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Mobility, also takes over the position of Chief Financial Officer at Mercedes-Benz AG.
Markus Schäfer, currently Member of the Board of Management of Daimler AG and Mercedes-Benz AG, takes on a new role as Chief Operating Officer at Daimler AG, and will also control the entire value creation process of Mercedes-Benz Cars — from development to material purchasing to production.
A new position of Product Strategy and Steering will be created for Mercedes-Benz Cars. Wolf-Dieter Kurz, who reports directly to the CEO of Mercedes-Benz AG, will take over that spot. Ola Källenius also assumes overall responsibility for Mercedes-Benz Vans.
The stated goal for the reshuffling is to “improve the development and production processes of vehicles, technologies and services through closer and more efficient cooperation.”
“Acting today to be fit for tomorrow’s global competition… we welcome the streamlining of the organizational and management structure proposed by the Board of Management. All activities focus on future proofing and improving our financial strength, as that is the basis of a sustainable business strategy.” said Manfred Bischoff, Chairman of the Supervisory Board of Daimler AG.
Daimlers current brand portfolio includes Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Mercedes me, the brands smart, EQ, Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses.
Daimler Financial Services’ brands are the Mercedes-Benz Bank, Mercedes-Benz Financial Services, Daimler Truck Financial, moovel, car2go and mytaxi. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI).
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