In the first year under Ola Källenius, Daimler stumbled even more. The new boss is not to blame for this, but the expectations of him are huge. Can he fulfill them?
Stuttgart – Nobody who takes on a new job would like to be compared to the predecessor. But you can give it a try, David Rubenstein, the president of the distinguished Washington business club, might have thought. When he was on stage with Daimler boss Ola Källenius at the beginning of the year, he said: “Her famous predecessor Dieter Zetsche, who also sat on this stage, had a striking walrus mustache. Have you never considered wearing something like this? ”Källenius didn’t have to think long. “Not yet. But if it helps selling more cars, I might have to think about it too. ”
Growing risk of takeover
At the beginning of the year, when Källenius caused some laughs in the audience, little was known about the Corona crisis. A little later, however, Daimler hardly thought of selling a car. After all, who wants a car when ten million people in Germany have registered short-time work, tens of millions lose their jobs in the United States and, moreover, the car dealerships are closed for weeks? Instead of cars, Källenius had to sell bad news off the assembly line in his first year in office – to both employees and shareholders.
Under Källenius, the share price fell by 40 percent within a year, significantly more than at BMW and Volkswagen. Politicians are growing nervous that German groups, not least Daimler, will become bargains for investors, for example from China, where two of the largest single investors are already based. A “ride on the razor blade” for the company, as auto professor Stefan Bratzel from the Bergisch Gladbach University of Applied Sciences says. On the one hand, there are important shareholders with whom one also tackles strategic projects, on the other hand, there is now the risk of a takeover by shareholders, from whom one does not necessarily want to be dominated in view of Germany as an industrial location.
Work on contaminated sites
The difficulties that Daimler is facing go back far before Källenius ’taking office. There is, for example, the considerable backlog in electromobility. By drastically lowering the limit values, Brussels is forcing car manufacturers to fully rely on battery vehicles because the values cannot be achieved with petrol and diesel alone.
It may be considered absurd that the EU prefers electric cars so much, although they will continue to run on coal for a long time. But the legislation has been emerging for years. Daimler opted for a defiant go-ahead instead of adjusting to what’s coming, be it reluctantly. That is why BMW and VW are significantly further ahead than the Daimler group, which has hardly brought such cars onto the road so far. Now Källenius has the Herculean task to reduce the average consumption of the new car fleet from 137 to just over 100 grams of CO2 per kilometer within a few months. Otherwise, the EU faces fines of billions, which cost a demanding manufacturer like Daimler not only money but also reputation.
He can handle pressure
Källenius has been with Daimler for 27 years; After studying finance and international management, the 1.95-meter giant who grew up in Malmö, Sweden, immediately joined the group’s international junior research group. For a decade and a half, he climbed the rungs on the career ladder roughly every two years. After 16 years, he became the head of the daughter in Tuscaloosa in the United States, and he has been a member of the board of directors for five years, most recently with responsibility for research and auto development. The shortcomings of past years should not have been completely hidden from him.
One thing the 50-year-old father of three sons is benefiting right now is his ability to deal with pressure. When he presented his long-awaited strategy in London last autumn, a number of critical questions pounded him. Some complained that the costs were still too high, others that the investments were insufficient. However, like his predecessor, he never begins to react irritably or pampy. Only he knows whether he just puts on a poker face or whether the cool serenity reflects his inner state of mind.
Källenius also has no good news for the workforce that has been spoiled for years of success. Already months before the corona crisis, he announced a massive downsizing, which – as was later added – should be in the five-digit range. While he said sentences like “I’m counting on you” in videos to the staff, internal papers that our newspaper reported gave a different look at the pitch. There are double voluntary measures in terms of downsizing, but executives were given guidelines on how to explain to employees that the decision to split up had already been made. Those who are stubborn should be told that “everything changes for you”.
But unlike under Zetsche, Källenius does not create hardened fronts even under pressure. He included the workers, “led many discussions very openly and made clear announcements,” said General Works Council Chairman Michael Brecht. That is sometimes “very hard, but better than not telling us something or fooling us”. The initially violent dispute over the separation talks has so far been surprisingly harmonious. After Brecht warned the company against building “threatening backdrops” and even spoke of a “red line”, the company backed off. The dispute has been defused, but the problem has not yet been solved.
From hotspot to hotspot
Liquidity here, staff there; here the material stocks, there the investment costs: Källenius dives from hotspot to hotspot, and a manager of a medium-sized supplier worries that Källenius is talking about his company like a restructuring case. But in the face of all these defensive struggles against impending calamity, where is the strategy, the look ahead, the confidence? How and when does Daimler want to get out of the mess?
“The contours of his strategy are still out of focus,” says Bratzel. “On the one hand, he has to carry away a whole rucksack of contaminated sites, on the other hand he has to create the conditions for the group to be strong again in five to ten years,” says the industry expert. It is not enough to put visions like climate neutrality in the room. “This must also be backed up by measures. The steps must be clear. “
Expert: Success would be good now
In the corona crisis, however, Källenius sent a clear signal that there is more for him than just austerity. Although the company almost shut down entire factories for weeks, work on strategic projects continued. This applies to the development of future technologies as well as to the manufacture of batteries for electric cars. Its delayed start was made even more difficult by delivery problems with battery components. In the best case, the corona crisis means that the battery bottleneck loses its importance and the electric cars with the star come onto the road faster.
Corona Daimler may be helping to escape the billion dollar fines, or at least reduce them. In these times, it would be a success to avert the next setback. Källenius needs success, says Bratzel. These would “help him to show more leadership and give the company orientation”.