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[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 MotorenGesellschaft (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 MotorenGesellschaft 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.
[edit]Timeline of Daimler AG
Benz & Company, 1883–1926
Daimler MotorenGesellschaft AG, 1890–1926
Daimler-Benz AG, 1926–1998
DaimlerChrysler AG, 1998–2007
Daimler AG, 2007–present
Chrysler has 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" US auto makers, but in January 2007, DaimlerChrysler,
excluding its luxury Mercedes and Maybach lines, also outsold traditionally second place Ford, though
behind General Motors and Toyota.
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.[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. The fourth-generation Jeep Grand Cherokee is based on
theMercedes-Benz M-Class despite the fact it had been nearly four years after the Daimler/Chrysler split.
[8]
[edit]Sale of Chrysler
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-Nissanauto
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.[9]
The terms saw Daimler pay Cerberus US$650 million to take Chrysler and associated liabilities off its
hands. This is a remarkable reverse in fortunes on the US$36 billion paid to acquire Chrysler in 1998. 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, which unlike Daimler plans to integrate Chrysler's products into the Fiat
portfolio, most notably Lancia and Chrysler's namesake brand.
[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".
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.
WilfriedPorth: Head of Human Resources and Labor Relations.
Andreas Renschler: Head of Daimler Trucks.
BodoUebber: Head of Finance and Controlling as well as Financial Services.
Dr. Thomas Weber: Head of Group Research and Mercedes-Benz Cars Development.
[edit]Shareholders Structure
by Ownership [12]
by Region [12]
30.0% Germany
33.5% Other Europe
17.9% United States
9.1% United Arab Emirates
6.9% Kuwait
2.6% Others
[edit]Brands
Mercedes-Benz Cars
Maybach
Mercedes-Benz
Smart
Mercedes-AMG
Daimler Trucks
Commercial vehicles
Freightliner
Mercedes-Benz (truck group)
Mitsubishi Fuso
Thomas Built Buses
Sterling Trucks - operations wind down in 2010, but will continue to support
authorized dealers and vehicle owners
Western Star
Components
Detroit Diesel
Mercedes-Benz
Mitsubishi Fuso
Daimler Buses
Mercedes-Benz buses
Orion Bus Industries
Setra
Mercedes-Benz Vans
Mercedes-Benz (vans group)
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.
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.[17] 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 a
senior Turkmenistan official including a golden box and 10,000 copies of the official's
personal manifesto translated into German.
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 from
the sale of vehicles and spare parts in the corrupt Oil-for-Food deals.[16]
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.[18]
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.[19]
"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.[21] 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 theNYSE, 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.[22]
[edit]Alternative propulsion
[edit]Biofuel research
Daimler AG is involved in a joint project with Archer Daniels Midland Company and Bayer CropScience to
develop jatropha as a biofuel.[23]
[edit]Transport electrification
Carmaker Daimler AG and the utility company RWE AG are going to begin a joint electric car
and charging station test project in the German capital, Berlin, called "E-Mobility Berlin".[24][25]
Mercedes-Benz is launching its first passenger car model equipped with a hybrid drive system in summer
2009, the Mercedes-Benz S 400 HYBRID.[25]
Daimler Trucks is the world market leader in hybrid systems. With its “Shaping Future Transportation”
initiative, Daimler is pursuing a clear-cut objective for trucks and buses. The Mitsubishi Fuso “Aero Star
Eco Hybrid” is now setting new standards in practical trials in Japan.[26]
[edit]Formula 1
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 will sell its 40% stake in McLaren back in phases
which will end in 2011. Mercedes will continue to provide sponsorship and engines to McLaren until 2015,
when McLaren will probably have to find an engine supplier or make its own engines. 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 Michael Schumacher.
History of DaimlerChrysler
I INTRODUCTION
DaimlerChrysler AG, one of the world’s largest manufacturers of cars and trucks, formed in 1998 when German
industrial giant Daimler-Benz AG merged with American automobile manufacturer Chrysler Corporation.
DaimlerChrysler manufactures the Mercedes-Benz line of German luxury automobiles as well as vehicles under the
American brand names of Chrysler, Dodge, Plymouth, Eagle, and Jeep. Besides automobiles and trucks,
DaimlerChrysler also manufactures aircraft and aircraft engines, satellites and space systems, guided missilesand
weapons systems, trains, electronics, and home appliances. Production of automobiles, however, remains the
company’s core business. DaimlerChrysler maintains headquarters in Stuttgart, Germany, the original home of
Daimler-Benz, and in Auburn Hills, Michigan, the original headquarters of Chrysler.
Still struggling in 1995, the company lost $3.9 billion. However, its automobile division, which accounted for
two-thirds of the company’s business, regained profitability. In the early 1990s Mercedes opened car plants in the
United States, India, and China in an effort to cut labor costs and open markets.
Chrysler frequently misjudged consumer tastes and needs. In the 1950s it introduced boxy cars while GM and
Ford launched sleek-looking models. In the early 1960s the company launched small cars just as consumers began
to demand power and luxury. With oil prices high in the early 1970s, Chrysler maintained its line of large,
inefficient cars. As a result, Chrysler’s share of the U.S. automobile market dropped from 21 percent in 1952 to
just 9 percent in 1979. The company suffered severe financial losses throughout the 1970s.
In 1978 the company hired former Ford president Lee Iacocca as its president and chief executive officer. In
1980, as Chrysler faced bankruptcy, the federal government agreed to guarantee $1.5 billion in loans to keep the
company afloat. The bailout was unpopular among many Americans, but Iacocca appeared on television and
made speeches to explain Chrysler’s position. His efforts helped win support for the company, which paid back
the loans in 1983, seven years early.
In the early 1980s Chrysler closed several plants and laid off thousands of workers. At the same time, it
introduced a successful line of new vehicles, including Chrysler K-cars, the Dodge Aries, the Plymouth Reliant,
and the LeBaron convertible. In 1984, the year it introduced the best-selling Dodge Caravan and Plymouth
Voyager minivans, Chrysler earned record profits of $2.4 billion. In 1987 Chrysler acquired American Motors
Company, maker of Eagle cars and four-wheel drive Jeeps. The company diversified by buying aerospace and
rental-car businesses, but it sold these and other noncore businesses in the 1990s.
In 1991 the company lost $795 million due to poor sales during an economic recession. But from 1992 to 1995,
the company increased its revenues based on the strong sales of its minivans and Jeep Grand Cherokee. In 1997 a
month-long strike by 1,800 workers at a key engine plant in Detroit caused the company to lose $450 million. The
strike was the longest at a Chrysler plant in 30 years.
IV MERGER In 1998 Daimler-Benz acquired Chrysler Corporation for $38 billion, representing one of
the largest industrial mergers in history. Analysts of the automobile industry observed that the new company
combined Daimler-Benz’s attention to quality with Chrysler’s low-cost manufacturing strategies. The merger also
positioned DaimlerChrysler for expansions into Asian and Latin American markets, where analysts predict
significant future growth in the automobile industry. At the same time, Daimler-Benz’s distribution network allowed
the company to rapidly expand the Chrysler automobile lines to markets in Europe.
Many economists considered the creation of DaimlerChrysler an indication of the advantages and challenges of a
global economy. For example, the merger allowed the companies to cut costs by combining many of their research,
production, and marketing efforts. However, the original German and American companies also faced significant
differences in corporate tradition and national culture. Daimler-Benz, for example, was known for its highly
complex and stratified management structure, whereas Chrysler had worked hard during the 1980s and 1990s to
develop into a streamlined, profit-driven organization. Despite these differences, the merged company expected to
reach a much wider range of customers with a fully diversified line of passenger cars, trucks, and utility vehicles.