Mobbing At Mercedes: Dr. Z Under Fire, Bernhard Back In Play

While the world was watching Volvo going to Geely, Germany was playing artillery observer: Daimler’s Zetsche came under a barrage of criticism last weekend. Not because of the graft accusations. That counts as necessary evil, at least if done abroad. Zetsche committed a mortal sin: He’s losing money, again. After losing billions in 2009, Daimler is supposed to turn the corner this year. But it doesn’t look that way.

The profitability of Mercedes “is beyond the pale,” leaked an anonymous member of Daimler’s Supervisory Board to the Frankfurter Allgemeine Zeitung. The supervisor didn’t ask for Dr. Z’s head. Just half a head. Currently, Zetsche is CEO of Daimler AG. At the same time, he heads up the Mercedes brand. “This double responsibility is unacceptable,” grouched the board member. Dr. Z should focus on being the God of Daimler, and should leave mundane matters, such as the managing of Mercedes, to dedicated personnel.

As the topic did spread like wild fire to the Handelszeitung, Die Welt, and Reuters, immediately Wolfgang Bernhard was brought into play. Bernhard was Zetsche’s confidante and hatchet man when both went to Detroit to run Chrysler (“into the ground” as many will say at this point). Back from Detroit, Bernhard was designated as chief of the Mercedes brand. The unions didn’t like a cost cutter. Bernhard had to go, officially because of irreconcilable differences about the Mitsubishi engagement. He left in a huff in 2005 and appeared at Volkswagen as head of the VW brand, including Škoda, Bentley and Bugatti.

At Volkswagen, Bernhard quickly earned the nickname “Terminator.” Management revered him. But again, he didn’t make friends with the powerful unions. When Piech brought in Winterkorn as CEO, and as chief of the Volkswagen brand, Bernhard didn’t accept the demotion as head of production, and left.

He popped up at Cerberus as a “consultant” when Cerberus got its hands on Chrysler. That lasted only a few months. Last year, the Zetsche/Bernhard couple was reunited at Daimler. Bernhard was made head of the truck division, and everybody knew that this was only temporary. Since February this year, Bernhard is back on the board of Daimler, in charge of Purchasing and Production for Mercedes Benz cars. Immediately the wink, wink, nod, nod was: This man is the big boss in waiting.

Officially, Daimler denies all rumors. Manfred Bischoff, Chairman of the Supervisory Board, said: ”From my perspective, this discussion does not exist.” A Daimler spokesman, disturbed during his well-earned weekend, said: “Dieter Zetsche is and remains in charge of both.”

At the Geneva Auto Show, Zetsche already had denied rumors of Bernhard’s rise: “It’s no secret that we worked well together and I’m happy to have him back. But he’s not my crown prince and he’s not my deputy,” Dr. Z. said to Automotive News. “If you want to do him a favor, stop speculating,” Zetsche told journalists. Seems like Germany’s intrepid reporters are in no mood to dole out any favors.