Daimler AG.doc

Daimler AGFrom Wikipedia, the free encyclopediaJump to: navigation, search This article is about the German automobile manufacturer. For the British automobile manufacturer, see Daimler Motor Company.Daimler AGTypeAktiengesellschaftTraded asFWB:DAIIndustryAutomotive industryPredecessor(s)Daimler-BenzFounded1998HeadquartersStuttgart, GermanyArea servedWorldwideKey peopleDieter Zetsche (CEO and Chairman of the management board), Manfred Bischoff (Chairman of the supervisory board)ProductsAutomobiles, commercial vehicles (list of brands.)Revenue106.54 billion (2011)1Operating income8.755 billion (2011)1Profit4.498 billion (2010)1Total assets148.132 billion (end 2011)1Total equity41.34 billion (end 2011)1Employees267,274 (end 2011)1WDaimler AG(helpinfo) (German pronunciation: daml ae; formerly DaimlerChrysler) 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.The company also owns major stakes in aerospace group EADS, high-technology and parent company of the Vodafone McLaren Mercedes racing team McLaren Group (which currently is in the process of becoming a fully independent stand-alone corporate entity2), and Japanese truck maker Mitsubishi Fuso Truck and Bus Corporation.Daimler produces cars and trucks under the brands of Mercedes-Benz, Maybach, Smart, Freightliner and many others.Contentshide 1 History o 1.1 Timeline of Daimler AGo 1.2 Merger with Chrysler 1.2.1 Troubled relationship 1.2.2 Sale of Chryslero 1.3 Renault-Nissan and Daimler Alliance 2 Corporate affairs o 2.1 Managemento 2.2 Shareholder profile 3 Brands 4 Holdings 5 Partners 6 Alternative propulsion o 6.1 Biofuel researcho 6.2 Transport electrification 7 Formula 1 8 Bribery and corruption 9 Notes 10 References 11 External linksedit HistoryDaimler 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 mergedbecoming 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 namenote 1 of the parent company was changed to simply Daimler AG.edit Timeline of Daimler AGBenz & Company, 18831926Daimler Motoren Gesellschaft AG, 18901926Daimler-Benz AG, 19261998DaimlerChrysler AG, 19982007Daimler AG, 2007presentedit Merger with ChryslerThe 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,3 and formed DaimlerChrysler AG. The terms of the merger allowed Daimler-Benzs 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 1997.45edit Troubled relationshipThe 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 Jrgen E. Schrempp, who resigned at the end of 2005 in response to the fall of the companys 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.7Another 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 Mercedess 3.2L V6, and the Dodge Sprinter/Freightliner Sprinter, a re-badged Mercedes-Benz Sprinter van.edit Sale of ChryslerChrysler had suffered a series of setbacks in recent years, culminating in DaimlerChryslers 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 Daimlers reluctance to allow Chrysler to continue development and use quality materials, Chrysler vehicles suffered lower fit and finish quality as well as sub-standard parts being supplied and used in spite of concerns. 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 2008.8DaimlerChrysler 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 werent 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.9The 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 Chryslers 2009 bankruptcy filing in the United States, Chrysler has been controlled by Italian automaker Fiat, which unlike Daimler plans to integrate Chryslers products into the Fiat portfolio, most notably Lancia and Chryslers 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 .10edit Renault-Nissan and Daimler AllianceOn April 7, 2010 Renault-Nissan executive, Carlos Ghosn and Dr. Dieter Zetsche announced a partnership between the three companies in a joint press conference.11edit Corporate affairsedit ManagementDr. 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.12edit Shareholder profileby Ownership13 Aabar Investments (United Arab Emirates): 9.0% Kuwait Investment Authority (Kuwait): 6.9% Renault (France): 1.55% Nissan (Japan): 1.55% Institutional investors: 61.9% Private Investors: 19.1%by Region13 28.2% Germany 36.9% Europe ex-Germany 15.4% United States 9.0% United Arab Emirates 6.9% Kuwait 3.6% Othersedit BrandsDaimler sells automobiles under the following marques worldwide: Mercedes-Benz Cars o Maybacho Mercedes-Benzo Smarto Mercedes-AMG Daimler Trucks o Commercial vehicles Freightliner Mercedes-Benz (truck group) Mitsubishi Fuso Thomas Built Buses Sterling Trucks - operations winded down in 2010, but will continue to support authorized dealers and vehicle owners Western Star BharatBenzo Components Alliance Truck Parts Detroit Diesel Mercedes-Benz Mitsubishi Fuso Daimler Buses o Mercedes-Benz buseso Orion Bus Industries - operations winded down in 2012, expected to close in 2013o Setra Mercedes-Benz Vans o Mercedes-Benz (vans group) Daimler Financial Services o Mercedes-Benz Banko Mercedes-Benz Financialo Daimler Truck Financial Others o Mercedes AMG High Performance Powertrains (Builds engines for Formula 1 Racing)edit HoldingsDaimler currently holds interests in the following companies: 85.0% Mitsubishi Fuso Truck and Bus Corporation of Japan 50.1% Automotive Fuel Cell Cooperation of Canada 22.4% European Aeronautic Defence and Space Company (EADS) - the parent company of Airbus of Europe 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 7.8% Tesla Motors of United StatesAt the end of 2011 McLaren Group completely bought back the stocks from Daimler.edit PartnersDaimler has built 1,000 all-electric versions of its Smart Fortwo using Teslas battery technology.14 Daimler works with Chinas Beiqi Foton (a subsidiary of BAIC) to build Auman trucks,15 and with BYD to develop EV technology.16edit Alternative propulsionedit Biofuel researchDaimler 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.17edit Transport electrificationCarmaker 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.1819Mercedes-Benz is launching its first passenger car model equipped with a hybrid drive system in summer 2009, the Mercedes-Benz S 400 HYBRID.19Daimler 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.20edit Formula 1Main article: Mercedes-Benz in Formula OneOn 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 Michael Schumacher.edit Bribery and corruptionOn April 1, 2010, Daimler AGs 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.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.21The 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.22 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 Daimlers 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. 2324Investigators 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 in profit from the sale of vehicles and spare parts in the corrupt Oil-for-Food deals.21U.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.25Prosecutors 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.26It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice, Robert Khuzami, director of the SECs enforcement division, said in a statement.27We have learned a lot from past experience, Dieter Zetsche, chairman of Daimlers 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.28 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 makers 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 c