Daimler's Bailout From The Big Sandbox

Edward Niedermeyer
by Edward Niedermeyer

Daimler has announced that it will raise $2.67 billion to fund future operations, reports Automotive News [sub]. But since we know that the BMW share swap has been nixed by the Quandts, how is Daimler coming up with the cash? By snaffling Opel’s cash from the German government? Or perhaps by jumping on the DC bailout express? No, Daimler followed the real money back to the Persian Gulf. Abu Dhabi’s Aabar Investments (owned by the state-run International Petroleum Investment Company) will buy a 9.1 percent stake in the German firm. After all, when you’ve repeatedly been fined for violating CAFE standards, you go to the oil wells, not the halls of government for your cash injection. The Emirate of Kuwait had already owned a 7.6 percent stake in Daimler, an investment that has been diluted to 6.9 percent by Aabar’s investment. But according to the analysts, Daimler had little choice but to take Aabar’s cash.

“We estimate [Daimler] will burn more than 18 million euros of cash per day in 2009, which means the capital increase would absorb not much more than 100 days of cash burn,” says Morgan Stanley’s Adam Jonas. And Jonas sees Daimler’s struggles as part of a wider trend among European automakers, predicting that Europe’s auto sector will burn over half of its capitalization over the next year.

But cash doesn’t come free. Abaar expects Daimler to cooperate with their three project areas: developing EVs that would reduce carbon emissions, developing innovative compound materials to be used in automotive manufacturing, and social projects in Abu Dhabi to educate young talent for positions in the car industry. And you know electric vehicles are in it for the long haul when oil money is invested in their development.

Edward Niedermeyer
Edward Niedermeyer

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  • PeteMoran PeteMoran on Mar 23, 2009

    Ha! The middle-east own the USA too, if not literally in their hordes of dollars, but into the future with USA's complete and utter dependence on oil. Nice work, you did it all to yourselves in under 50 years.

  • Nick Nick on Mar 23, 2009

    Dammit, I hoped briefly that this was going to be a story about DB being almost bust and begging for money...kind of like they did to Chrysler. I guess after building all those buildings they STILL have money left over.

  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
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