Daimler Investors Seeking 900 Million in Diesel Damages

Matt Posky
by Matt Posky
daimler investors seeking 900 million in diesel damages

Over 200 investors are seeking 900 million euros in damages over claims that Mercedes-Benz parent Daimler failed to disclose the use of emissions cheating devices similar to those that got Volkswagen into trouble back in 2015. This isn’t the first time the issue has come up. German prosecutors claimed nearly 690,000 Mercedes-Benz vehicles came equipped with rigged exhaust gas after-treatment systems and Daimler was slammed with a €870 million ($960 million) fine over the negligent violation of European clean air standards in the fall.

Those who invested into the firm are hoping to recoup losses from the scandal after the automaker’s share price shat the bed. Lawyers repressing the investors are seeking compensation after Daimler’s stock fell from €90 a share fall to approximately €60 in 2018, once German regulators began formally accusing the automaker of trying to circumvent emission rules.

Daimler really doesn’t have any excuses. When VW was under suspicion of having used defeat devices on its diesel models, automakers around the world (especially those operating Germany) fell under enhanced scrutiny. The automaker denied using similar systems in 2015 and even helped blow the whistle on the suspected auto cartel between Daimler, BMW, and Volkswagen Group in 2017. But despite agreeing to pay the regulatory fines stemming from failing to adhere to regional clean air standards, it’s never once admitted to any legitimate wrongdoing.

While that could be viewed as it taking a corporate stance against the potentially overzealous emission standards being placed on carmakers in the EU, Mercedes-Benz has embraced electrification on a level few can match. Last year, the business announced a restructuring program to eliminate 10,000 positions in an effort to save over a billion bucks in personnel costs. The reason? It needs funds to help pay for the development of future electric vehicles and intends on delivering roughly ten new models by 2022. At the same time, Daimler has decided to end all development of internal-combustion engines so it can better focus on EVs.

According to the Financial Times, the manufacturer said it had yet to receive any formal notice of the lawsuit. It’s framing the case against it as meritless and promised to defend itself “by all legal means.” It’s a very similar situation to what Volkswagen has been dealing with for years after its own monumental diesel scandal. Despite admitting criminal wrongdoing in the United States, VW has continued to defend itself in prolonged European suits.

From FT:

The claim against Daimler mirrors a long-running suit against VW, in which shareholders are seeking more than €9bn in damages, in a case that resembles a US class action.

Attorney Andreas Tilp, who represents plaintiffs in both cases, said investors who believed Daimler’s initial denials had, therefore, acquired shares “at too high a price”.

“We are convinced that Daimler is liable for damages in return,” Mr Tilp added. His law firm also said it had filed further lawsuits on behalf of more than 100 private investors.

They suggest Daimler knowingly cheated investors by failing to inform them about risks and costs of the software installed in the suspect diesel vehicles. Collectively, the cases cover shareholders who bought stock between July 10th, 2012 and June 20th, 2018.

[Image: Pixfly/Shutterstock]

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  • Schurkey Schurkey on Jan 08, 2020

    The primary problem here is that the Corporate Criminals are not appropriately responding to an impossible situation, created by Criminal Politicians. Both sides need to be shown prison cells. The Criminal Politicians, as part of The War on Cars (internal combustion, at any rate) enacted emissions and fuel economy standards that are impossible to meet and still produce a product that consumers will purchase without being bribed. The Corporate Criminals chose to cheat instead of telling the Politicians it was impossible, and then ENDING Diesel sales in affected markets if the politicians didn't listen to reason and science instead of politically-correct bullshit. The appropriate "fix" to this is to return Diesel emissions regulations to mirror the regs pre-DEF; at least until Diesel technology is PROVEN to do better without dramatic price increases, and consumer irritation. And in the USA, CAFE should be ended outright.

  • Tele Vision Tele Vision on Jan 08, 2020

    "Lawyers REPRESSING the investors..." Heh!

  • SCE to AUX Good summary, Matt.I like EVs, but not bans, subsidies, or carbon credits. Let them find their own level.PM Sunak has done a good thing, but I'm surprised at how sensibly early he made the call. Hopefully they'll ban the ban altogether.
  • SCE to AUX "Having spoken to plenty of suppliers over the years, many have told me they tried to adapt to EV production only to be confronted with inconsistent orders."Lofty sales predictions followed by reality.I once worked (very briefly) for a key supplier to Segway, back when "Ginger" was going to change the world. Many suppliers like us tooled up to support sales in the millions, only to sell thousands - and then went bankrupt.
  • SCE to AUX "all-electric vehicles, resulting in a scenario where automakers need fewer traditional suppliers"Is that really true? Fewer traditional suppliers, but they'll be replaced with other suppliers. You won't have the myriad of parts for an internal combustion engine and its accessories (exhaust, sensors), but you still have gear reducers (sometimes two or three), electric motors with lots of internal components, motor mounts, cooling systems, and switchgear.Battery packs aren't so simple, either, and the fire recalls show that quality control is paramount.The rest of the vehicle is pretty much the same - suspension, brakes, body, etc.
  • Theflyersfan As crazy as the NE/Mid-Atlantic I-95 corridor drivers can be, for the most part they pay attention and there aren't too many stupid games. I think at times it's just too crowded for that stuff. I've lived all over the US and the worst drivers are in parts of the Midwest. As I've mentioned before, Ohio drivers have ZERO lane discipline when it comes to cruising, merging, and exiting. And I've just seen it in this area (Louisville) where many drivers have literally no idea how to merge. I've never seen an area where drivers have no problems merging onto an interstate at 30 mph right in front of you. There are some gruesome wrecks at these merge points because it looks like drivers are just too timid to merge and speed up correctly. And the weaving and merging at cloverleaf exits (which in this day and age need to all go away) borders on comical in that no one has a bloody clue of let car merge in, you merge right to exit, and then someone repeats behind you. That way traffic moves. Not a chance here.And for all of the ragging LA drivers get, I found them just fine. It's actually kind of funny watching them rearrange themselves like after a NASCAR caution flag once traffic eases up and they line up, speed up to 80 mph for a few miles, only to come to a dead halt again. I think they are just so used to the mess of freeways and drivers that it's kind of a "we'll get there when we get there..." kind of attitude.
  • Analoggrotto I refuse to comment until Tassos comments.