Mercedes' New Boss Takes a Costly Trip to the Repair Shop
July 12 2019 - 9:42AM
Dow Jones News
By Stephen Wilmot
When he retired in May, Daimler's long-time Chief Executive
Dieter Zetsche left his successor Ola Källenius with a big repair
bill.
The maker of Mercedes-Benz cars said Friday that operating
profits for the year would be "significantly" lower than last
year's. Less than three weeks before, it had said operating profits
would be broadly flat, itself a downgrade of previous guidance.
The biggest culprit is what Germany calls the "Dieselaffäre."
The first profit warning followed news that the company would
recall 60,000 diesel cars in Germany. Regulators found software
aimed at manipulating emissions tests in the vehicles -- seemingly
the same problem that has cost Volkswagen more than EUR30 billion
($33.79 billion). Daimler initially provisioned less than EUR1
billion to address the problem, but on Friday set aside an extra
EUR1.6 billion.
The company also earmarked big sums to deal with a van problem
and an industry-wide airbag fault that first came to light in 2013.
On top of that came warnings that sales growth is weakening and
product availability is patchy.
Nonetheless, Mr. Zetsche is due to draw a Daimler company
pension of more than EUR1 million a year -- a record in Germany,
according to local press reports.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
(END) Dow Jones Newswires
July 12, 2019 09:27 ET (13:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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