Still in the midst of a $1.4-billion restructuring plan that aims to cut 10 percent of its workforce, Mercedes-Benz is reconsidering what its product lineup should look like moving ahead. While most of the doomed models will be chosen due to lackluster demand (e.g. X-Class pickup) plenty will be nixed as a result of tightening emission laws. Mercedes parent Daimler issued two profit warnings in 2019 after the luxury brand was fined $960 million in an emissions-cheating settlement. Like many automakers, it was also hemorrhaging cash through its investments in electrification.
An apt analogy for the automotive industry’s stampede toward EVs would be lemmings hurling themselves off a seaside cliff — but not because of the popular misconception that the critters are intentionally committing mass suicide. When lemmings collectively off themselves, it’s the result of migratory behavior gone awry. They simply bunch up and move in a singular direction, largely unaware of the consequences.
In November, Daimler announced a restructuring plan that called for the elimination of 10,000 jobs, claiming the effort would result in an estimated 1.4 billion euros ($1.5 billion) in savings by the end of 2022. Chairman Ola Källenius may just be getting warmed up.
According to German outlet Handelsblatt, sources within the company claim austerity measures will be expanded at Tuesday’s investor conference. Källenius is said to raise the job cut figure to 15,000 while scaling back (or dropping) several side businesses that aren’t turning a profit. As well, the automaker will likely axe a few models that don’t fit in with the core brand’s luxury image, starting with the Nissan Navara Mercedes-Benz X-Class.
A new report indicates that BAIC Motor Corp, Daimler’s primary Chinese joint-venture partner, wants to increase its stake in the company. Currently, BAIC owns 5 percent of the German automaker ( purchased in July) with rumors swirling in October that the firm wanted to increase its investment. There were also claims that Geely was attempting to stand in the way of the prospective deal.
While not Daimler’s main squeeze in Asia from a production perspective, Geely actually owns 9.7 percent of the company — giving it quite a bit of leverage. As such, there were murmurings that Geely put the kibosh on any ideas BAIC had on investing further. Geely has rebuffed the accusation. “We are a long-term investor in Daimler. We do not react spontaneously to any volatility and we support Daimler’s management and their strategy,” the firm explained.
Be that as it may, there appears to be a minor power struggle between the two Chinese companies. Both seem interested in strengthening their influence and happen to find themselves in each other’s way.
On Thursday, Daimler made an announcement confirming earlier reports that it plans to cut roughly ten percent of its management staff as part of a broader restructuring plan. Financial hardship has become a sign of the times for the auto industry. Most sizable manufacturers are coming off an investment spree aimed at developing new-energy vehicles, autonomous driving systems, and connected services. Unfortunately, those commitments came at roughly the same time the world’s largest auto markets started to collectively plateau.
A broad approach no longer seems feasible for all but the absolute largest automakers on the planet. We’ve seen many attempt to downsize through restructuring or by entering inte partnerships with other firms to share costs — sometimes both. Knowing this as well as anyone, Daimler issued two profit warnings this year as Mercedes-Benz was fined $960 million in an emissions-cheating settlement while hemorrhaging cash through EV investments.
Reports have come in from Germany that Mercedes-Benz has decided to reduce its management staff by around 10 percent globally. On Friday, German newspaper Suddeutsche Zeitung wrote that Daimler CEO Ola Källenius wishes to delete around 1,100 management posts while freezing wages for all 300,000 German employees — citing internal documents from the automaker’s works council.
Handelsblatt also said it intercepted a copy of the letter, with both outlets claiming Daimler would elaborate further on the plan this Thursday. While Mercedes said it couldn’t comment on the matter, its restructuring push was no secret, even before Källenius took over as chairman in May.
Sascha Pallenberg, Daimler’s Head of “Digital Transformation,” shared a quote from CEO Ola Källenius issued at this year’s Automobilwoche Kongress, saying Mercedes-Benz is planning to manufacture an electric G-Class.
“There will be a zero-emission EV version of the Mercedes-Benz G-Class. In the past there were discussions whether we should eliminate the model, the way I see things now I’d say the last Mercedes to be built will be a G-Class,” Källenius said.
Using current battery technologies, this seems idiotic. The G-Class already outweighs pretty much every EV on the market this author can think of and it’s only going to get heavier once it’s lugging around a gigantic battery pack. The lightest G-Wagon tips the scales at 5,550 pounds. Another thousand wouldn’t be out of the question if Daimler expects it to have a truly competitive range. The model is just too heavy and has the aerodynamics of an open parachute.
Cooperation between automakers is a good way to cope with rising costs but, if we’re being honest, it’s much more exciting when they don’t get along. Think about some of your favorite automobiles. Odds are good that they have a counterpart from another manufacturer they’re supposed to be warring with — Mustang vs Camaro, WRX STI vs Lancer Evolution, Camry vs Accord, Gremlin vs Pinto.
The best rivalries are between manufacturers, as those provide ample opportunity for snide marketing. If we had our druthers, automakers would be forced to compete in biannual gladiator-style competitions that open with scored trash talk. But dreams rarely come true; automotive bloodsports probably require a few years of heavy planning, too.
Luckily, industrial-grade insults aren’t something we have to wait for. To our delight, Daimler AG and BMW Group were going at it on Halloween.
The next-generation Mercedes-AMG C63 will be quite a bit different than the model that’s currently on sale. We’ve already heard stirrings that rear-wheel drive will be swapped for standard all-wheel drive with the sub-brand’s now-familiar drift mode. But additional rumors now suggest the Autobahn bruiser is poised to abandon its 4.0-liter biturbo V8.
While nothing has been confirmed by the manufacturer, Autocar claims details sourced from AMG’s Affalterbach engineering HQ indicate the C63 will embrace a 2.0-liter inline-four using a 48V mild-hybrid system.
Daimler has been forced to store thousands of vehicles at a former military airport in northern Germany, the result of supplier issues that are stalling deliveries of the updated GLE-Class. While keeping cars on ice until they can be shipped is totally normal, it’s odd to see them lined up on a runway. It makes it look like they’re all about to take to the sky or engage in the most congested drag race in history.
Assembled in Alabama, these SUVs are being held up by unknown supply chain problems. Mercedes-Benz suggested there may be also be problems stemming from the multi-market launch of the updated GLE and a surge in output from the U.S. factory.
Despite vans being slightly more popular than getting a thumb in the eye, Mercedes-Benz is sticking with them. Earlier in the month, the automaker revealed the production version of its 252-mile (we’ll see) EQV. Essentially an electrified version of the plush V-Class/Metris, the model will likely serve a very specific subset of the population.
On the other end of the spectrum, Daimler has been mulling over what should be done about the Citan. As the smallest van in MB’s range, the Citan also has the lowest point of entry. However, sales are roughly one-sixth what the V-Class sees in Europe, making it a plausible candidate for discontinuation. But it was not to be. On Friday, Daimler announced it will keep its smallest MPV on the table.
It would appear that nobody notified Mercedes-Benz that the minivan segment is shrinking faster than male genitals dunked into icy water. Fortunately, while large MPV sales similarly dwindled in Europe by around 30 percent last year, there may be enough positive heat on vans and electric vehicles leftover for the manufacturer to try and bundle both into one package. Enter the Mercedes-Benz EQV — the next arrival for the EQ sub-brand and first non-commercial, electric luxury van offered by an established automaker. Sounds like a niche market.
While not officially scheduled to debut until next month’s Frankfurt Motor Show, the EQV has already been teased as a near-production prototype at the 2019 Geneva Motor Show. Daimler’s also felt comfortable enough to showcase the finished vehicle online, saving a handful of details for the German trade show.
Beijing Automotive Group Co Ltd (BAIC) announced on Tuesday that it had purchased a 5 percent stake in Daimler AG. Despite the pair have been partners in Asia since 2003, via the Beijing Benz Automotive joint venture, Zhejiang Geely Holding Group purchased nearly 10 percent of the German company in 2018 and was reportedly seeking high levels of cooperation.
As one of Geely’s direct rivals, BAIC claimed its investment would help solidify the relationship with Daimler. “This step reinforces our alignment with, and strong support for, Daimler’s management and strategy,” BAIC chairman Heyi Xu said in an official statement.
Planned successor for Daimler CEO Dieter Zetsche, Ola Källenius, says Mercedes-Benz will significantly reduce development costs under his supervision by accelerating alliances throughout the industry. This, of course, has everything to do with electric cars, as that’s all auto executives seem capable of discussing anymore.
“The cost structure of the electric car is above that of the combustion engine car. We are working hard on lowering this,” Källenius said on Monday. “We need to work on the cost of vehicle architectures. From where we are now, we need to make a significant step by 2025 in terms of cost.”
Mercedes-Benz is reportedly considering moving C-Class production out of America to make room on its Alabama assembly line for more high-margin utility vehicles. Despite being the brand’s best-selling sedan in the United States, Mercedes knows it has to acknowledge the public’s growing propensity for luxurious light trucks.
While ignoring the present doesn’t seem like the wisest of business decisions, the market’s current trajectory is no secret. People want crossovers and SUVs and it looks as though Benz will happily provide them, even if it means icing out the still-popular C-Class before the end of next year.
A year after Chinese automaker Geely announced the purchase of a nearly 10-percent stake in auto giant Daimler AG, a second carmaker from the People’s Republic is reportedly interested in acquiring a piece of the German company’s action. A stealthy accumulation of shares could already be underway.
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- Sgeffe I'm wondering if any tooling or whatnot from the original was used in the production of this beast.
- Sgeffe I usually pass by the UCOTD posts, but I had to ask on this: what, pray tell, is with the sideview mirrors off a C5 Corvette??!! Yikes!
- Joseph Kissel I foresee ICE and EV co-existing for many, many years. But to answer the OP, who's going to be the automaker that sinks considerable funding into a NEXT-GEN ICE engine and vehicle platform? Which would also mean diverting that research from a next-gen EV battery / platform. In that regard, is BMW doing the right thing by releasing ICE and EV on a shared platform? Because I can see automakers putting lightly re-freshed ICE vehicles on the market (and maybe that's all that's needed at this point) ... But will we truly ever see something next-gen on the ICE front?
- Sgeffe It still boggles my pea brain that something that was pretty much standard on most cars two decades ago was left off of cars in the early teens! BUT if I understand things correctly, Canadian models had the immobilizers! (Along with heated steering wheels and other bits that would never be found on a car bound for, say, Minneapolis!)
- CEastwood Yep this is the bolt screwers last chance at the big money before all their jobs become extinct to robots and outsourcing to low wage countries . Prediction - they will get some compromise between what they want and what real world economics dictate . Then the car companies will gradually move their operations to other countries or southern states without unions . They are hastening the loss of their jobs and don't seem to care or even be aware of it .