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]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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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.
"Lawyers REPRESSING the investors..." Heh!