Daimler AG

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This article is about the German automobile manufacturer. For the British automobile manufacturer,
see Daimler Company.
Daimler AG

Type Aktiengesellschaft
Traded as FWB: DAI
Industry Automotive
Predecessor(s) Daimler-Benz
Founded 1998
Headquarters Stuttgart, Germany
Area served Worldwide
Key people Dieter Zetsche (CEO andChairman of the management
board), Manfred Bischoff(Chairman of the supervisory board)
Products Automobiles, commercial vehicles (list of brands...)
Revenue 106.54 billion (2011)
[1]

Operating
income
8.755 billion (2011)
[1]

Profit 5.667 billion (2011)
[1]

Total assets 148.132 billion (2011)
[1]

Total equity 41.34 billion (2011)
[1]

Owner(s) Institutional shareholders(69.1%)
Private shareholders (20.2%)
Kuwait Investment Authority(7.6%)
Renault-Nissan Alliance(3.1%)
[1]

Employees 267,274 (2011)
[1]

Divisions Mercedes-Benz
Mercedes-AMG
Smart
Subsidiaries List[show]
Website daimler.com
Daimler AG (helpinfo) (German pronunciation: [daml ae] FWB: DAI; formerlyDaimlerChrysler) is
a German multinational automotive corporation. Daimler AG is headquartered in Stuttgart, Baden-Wrttemberg,
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.
Contents
[hide]
1 History
o 1.1 Timeline of Daimler AG
o 1.2 Merger with Chrysler
o 1.3 Renault-Nissan and Daimler Alliance
2 Corporate affairs
o 2.1 Management
o 2.2 Shareholder profile
3 Brands
4 Holdings
5 Partners
6 Alternative propulsion
o 6.1 Biofuel research
o 6.2 Transport electrification
7 Formula One
8 Bribery and corruption
9 Notes
10 References
11 External links
[edit]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 May 1, 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 June 28, 1926, when Benz & Cie. and Daimler Motoren Gesellschaft AG formally merged
becoming Daimler-Benz AGand agreed that thereafter, all of the factories would use the brand name
of Mercedes-Benz on their automobiles.
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".
[edit]Timeline of Daimler AG
Benz & Company, 18831926
Daimler Motoren Gesellschaft AG, 18901926
Daimler-Benz AG, 19261998
DaimlerChrysler AG, 19982007
Daimler AG, 2007present
[edit]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 Dainler-Benz AG bought 98% of Chrysler,
[2]
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.
[3][4]

[edit]Troubled relationship
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.
[5]
The transaction claimed the job of its architect,
Chairman Jrgen 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.
[6]

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.
[edit]Sale of Chrysler
Chrysler had suffered a series of setbacks in recent years, culminating in DaimlerChrysler'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.
[7]

DaimlerChrysler had reportedly approached other carmakers and investment groups to sell Chrysler in early
2007. General Motors was reported to be a suitor while Volkswagen, the Renault-Nissan auto alliance,
and Hyundai Motor Company had said that they weren't interested in buying the company.
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.
[8]

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 Chryslers 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, which unlike Daimler 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 .
[9]

[edit]Renault-Nissan and Daimler Alliance
On April 7, 2010 Renault-Nissan executive, Carlos Ghosn and Dr. Dieter Zetsche announced a partnership
between the three companies in a joint press conference.
[10]

[edit]Corporate affairs
[edit]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 Mercedes-Benz Cars Procurement and Production.
Wilfried Porth: Head of Human Resources and Labor Relations.
Andreas Renschler: Head of Daimler Trucks.
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 Lagardre, Jrgen Langer, Helmut Lense, Sari Baldauf, William Owens, Ansgar
Osseforth, Valter Sanches, Manfred Schneider, Stefan Schwaab, Bernhard Walter, Lynton Wilson, Mark
Wssner, Manfred Bischoff, Clemens Brsig and Uwe Werner. Dr Manfred Bischoff serves as the Chairman of
the Supervisory Board of Daimler AG and Erich Klemm as Vice-Chairman.
[11]

[edit]Shareholder profile
by Ownership
[12]

Institutional investors: 69.1%
Private Investors: 20.2%
Kuwait Investment Authority (Kuwait): 7.6%
Renault (France): 1.54%
Nissan (Japan): 1.54%
by Region
[12]
35.9% Europe (excluding Germany), 33.3% German, 19.5% United States, 7.6% Kuwait, 3.3%
Asia, 0.4% Others.
[edit]Brands
Daimler sells automobiles under the following marques worldwide:
Mercedes-Benz Cars
Maybach - production ended in 2012
[13]

Mercedes-Benz
Mercedes-AMG
Smart
Daimler Trucks
Commercial vehicles
Freightliner
Mercedes-Benz (truck group)
Mitsubishi Fuso
Thomas Built Buses
Sterling Trucks - operations wound down in 2010, but will continue to support authorized dealers
and vehicle owners
Western Star
BharatBenz
Components
Alliance Truck Parts
Detroit Diesel
Mercedes-Benz
Mitsubishi Fuso
Daimler Buses
Mercedes-Benz buses
Orion Bus Industries - operations winded down in 2012, expected to close in 2013
Setra
Mercedes-Benz Vans
Mercedes-Benz (vans group)
Daimler Financial Services
Mercedes-Benz Bank
Mercedes-Benz Financial
Daimler Truck Financial
Others
Mercedes AMG High Performance Powertrains (Builds engines for Formula 1 Racing)
[edit]Holdings
Daimler currently holds interests in the following companies:
89.29% Mitsubishi Fuso Truck and Bus Corporation of Japan
50.1% Automotive Fuel Cell Cooperation of Canada
50% Engine Holding Rolls Royce holds the other 50%
49% Tognum of Germany due to the 50% share in Engine Holding, which holds 98% of the Tognum
Shares.
11% KAMAZ of Russia
7.5% European Aeronautic Defence and Space Company (EADS)
[14]
- the parent company of Airbus of
Europe
4.7% Tesla Motors of United States
[15]

At the end of 2011 McLaren Group completely bought back the stocks from Daimler.
[edit]Partners
Daimler has built 1,000 all-electric versions of its Smart Fortwo using Tesla's battery technology.
[16]
Daimler
works with China's Beiqi Foton (a subsidiary of BAIC) to build Auman trucks,
[17]
and with BYD to develop EV
technology.
[18]

[edit]Alternative propulsion
[edit]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.
[19]

[edit]Transport electrification
Carmaker 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".
[20][21]

Mercedes-Benz is launching its first passenger car model equipped with a hybrid drive system in summer 2009,
the Mercedes-Benz S 400 HYBRID.
[21]

Daimler Trucks is the world market leader in hybrid systems. With its Shaping Future Transportation initiative,
Daimler is pursuing hybrid propulstion for buses as well. The Mitsubishi Fuso Aero Star Eco Hybrid is now
setting new standards in practical trials in Japan.
[22]

[edit]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.
[edit]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 theU.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 Daimlers 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.
[23]

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.
[24]
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.
[25][26]

Investigators also found that the firm violated the terms of the United Nations' Oil-for-Food
Programme with Iraq by giving kickbacksworth 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.
[23]

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.
[27]

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 Departments criminal division.
[28]

"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.
[29]

"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.
[30]
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.
[31]