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Opening the "future planning" in 2020 Daimler's logic behind the dismantling

Opening the "future planning" in 2020 Daimler's logic behind the dismantling

(Summary description)On July 26, local time, the Daimler Group officially issued a statement saying that the group management board and the board of supervisors have adopted a new organizational restructuring plan. The current five business divisions will be reorganized into three independent new companies, namely Mercedes- Mercedes-Benz AG, Daimler Truck AG and Daimler Mobility AG.

Opening the "future planning" in 2020 Daimler's logic behind the dismantling

(Summary description)On July 26, local time, the Daimler Group officially issued a statement saying that the group management board and the board of supervisors have adopted a new organizational restructuring plan. The current five business divisions will be reorganized into three independent new companies, namely Mercedes- Mercedes-Benz AG, Daimler Truck AG and Daimler Mobility AG.

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2018-07-30 07:43:25 Source: China Automotive News (Beijing)

 

        On July 26, local time, the Daimler Group officially issued a statement saying that the group management board and the board of supervisors have adopted a new organizational restructuring plan. The current five business divisions will be reorganized into three independent new companies, namely Mercedes- Mercedes-Benz AG, Daimler Truck AG and Daimler Mobility AG.

 

        Behind the reorganization, the hidden situation is that the automobile industry is complex and changeable, and Daimler's profits are not optimistic. On the same day, the financial report released on the same day showed that Daimler’s EBIT and net profit dropped by 30% in the second quarter. Daimler's spin-off, Daimler's spin-off analysis, Daimler's three independent divisions, the division of the three major companies, the restructuring and restructuring of the three major groups is nothing new, the former Johnson Controls, Delphi, Autoliv, After that, there were Honeywell and Continental, and now Daimler also came to "join the fun."

 

         At present, Daimler's business is divided into five major parts: Daimler Financial Services, which is responsible for financial services; Daimler Trucks, which is responsible for multiple truck brands; Daimler Bus, which is responsible for large buses; and cars/SUVs, etc. The Mercedes-Benz passenger car division of the model; the Mercedes-Benz van sector for all types of MPV/van/urban delivery vehicles. After the reorganization, the Mercedes-Benz passenger car and van sector will be owned by Mercedes-Benz AG with 175,000 employees worldwide; the Daimler truck and bus division will be owned by Daimler Truck AG has 100,000 employees. The financial sector is currently legally operating independently and will be renamed Daimler Mobile Travel AG in the future with 13,000 employees. The headquarters of the three new companies are located in Stuttgart, where the current headquarters is located. Under the new organizational structure, the three companies will have greater freedom of decision-making, closer to the market and consumers, and more flexible and rapid cooperation with other companies. Daimler Supervisory Board Chairman Manfred Bischoff said: "The new architecture will enable Daimler to respond to the rapid changes in mobile travel and the corresponding strategic challenges. Independent legal entities will make us pay more attention to the future success of the company. ""

 

       Daimler's three independent companies start a new structure in 2020 This structural adjustment was named "PROJECT FUTURE", involving Daimler's 700 subsidiaries in 60 countries around the world. Daimler has reached an agreement with the union, which includes a series of job security guarantees and promises to invest 35 billion euros in Germany between 2018 and 2024. After approval by the Board of Directors and the Board of Supervisors, the restructuring plan will also be submitted to shareholders for approval at the Daimler Annual Meeting on May 22, 2019. If passed, it will have legal force in the fall of 2019.

 

Daimler expects that the new structure will be in place on January 1, 2020, and Daimler’s one-time cost is expected to reach hundreds of millions of euros, including taxes and fees generated by restructuring, and global restructuring Need to invest. Daimler has not announced the top management candidates for the three new companies. At the same time as the establishment of three new companies, Daimler Group, as the parent company, will continue to retain and lead the overall situation, undertake corporate governance, strategic planning and provide cross-company business services to ensure synergy between companies, as always, And provide financial support for the entire group.

 

       A year ago, there was news in the industry: "In response to disruptive technological changes such as autonomous driving, Daimler is considering the largest corporate change in a decade, paving the way for company splits and other transactions. The announcement of the adjustment plan means that Daimler’s transformation has entered the implementation phase. The reason why Daimler "thinking" is not related to its current operating conditions. On the same day, Daimler’s financial report showed that in the second quarter of this year, the Group’s operating income was 40.8 billion euros, down 1% from 41.2 billion euros in the same period last year; the profit before interest and taxes was 2.64 billion euros, much lower than the same period last year. 3.747 billion euros, a sharp drop of 29.5% year-on-year; net profit of 1.825 billion euros, compared with 2.512 billion euros in the same period last year, down 28%. The performance of Daimler's various sectors is not very satisfactory. Among them, the sales volume of the Mercedes-Benz passenger car sector, although due to price fluctuations including tariffs, temporary supply shortage caused by US supplier fires, and new technology spending, made its EBIT margin last year. During the same period, 2.365 billion euros fell to 1.9 billion euros. The Daimler truck, bus, and van sectors also experienced varying degrees of EBIT margins. Speaking of the biggest decline, it still appears in the financial sector. In the second quarter, Daimler Financial Services' profit before interest and taxes was only 66 million euros, much lower than the 522 million euros in the same period last year. The main reason is that Daimler's German truck high-speed toll company Toll Collect reached an agreement with the German government to compensate 3.6 billion euros. This incident caused Daimler's financial sector to suffer huge losses. In fact, Daimler’s performance in the first quarter of this year was also not good, and net profit fell by 11%, from 2.65 billion euros in the same period last year to 2.35 billion euros. Daimler expects that its overall EBIT margin for the 2018 group will be slightly lower than 2017. In an overall less than ideal performance, Daimler's share price fell to $69 from $90 per share at the beginning of the year. This may be one of the important reasons why Daimler decided to split.

 

        With the wave of electrification, intelligence, networking, and sharing, the automotive industry is undergoing tremendous changes, and car companies are either active or forced to transform. Daimler is no exception, and proposes a CASE strategy. Smart interconnection, automatic driving, shared travel, electric drive. In February of this year, Mercedes-Benz and BAIC Group signed an agreement to invest 11.9 billion yuan in a new luxury car production base in China to produce EQ series pure electric vehicles and other Mercedes-Benz models. In addition, according to the latest reports from foreign media, Daimler is considering whether to transfer some Mercedes-Benz production lines from the United States to China after being imposed tariffs. On the day before the reorganization plan was announced, on July 25, Daimler announced on the official website that it had signed a memorandum of understanding with Baidu to deepen the strategic cooperation between the two sides in the fields of autonomous driving and car networking. Following the CASE strategy, the proposed restructuring also reflects Daimler's urgency to respond to the rapid changes in the automotive industry. Cai Che, Chairman of the Daimler Group Management Board, said: “'Future Planning' is our strategic continuation. We are reorganizing our organizational structure to make Daimler the best in the future in terms of technology, culture and architecture. These changes The core lies in the global customer needs, with this new architecture, we will be able to provide them with more suitable mobile solutions."

 

This article Source: China Automotive News Author: Zhang Dongmei

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