STUTTGART, GERMANY: DAIMLER's Board of Management and the Supervisory Board of Daimler AG have approved a new divisional group structure, featuring three legally independent entities - Mercedes-Benz AG (cars and vans), Daimler Truck AG (inc. buses) and Daimler Mobility AG (its financial arm) - under the umbrella of Daimler AG, it's reported recently.
Described as the ‘most comprehensive due diligence in Daimler’s 130-year corporate history’, the new structure aims to “give its divisions greater entrepreneurial freedom, position them even closer to their markets and customers, while empowering them to enter partnerships more easily and quickly.”
Known as ‘Project Future’, the steps toward implementation will be taken in 2018 and 2019 on the basis of clear business and technical criteria, it’s stated, pending shareholder approval at the Annual General Meeting on May 22, 2019.
Manfred Bischoff, chairman of the Supervisory Board of Daimler AG: “The new structure positions Daimler to tackle the rapid pace of change in the mobility sector and the corresponding strategic challenges. Legally independent divisions will sharpen our focus on the future success of the business.”
Dieter Zetsche, chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars, said: “Project Future is the consistent continuation of our strategy. We are reshaping our organisation to put Daimler in the best position for the future: technologically, culturally – as well as structurally. At the heart of all these changes are the needs of our customers around the world. With this new structure we will be able to offer them mobility solutions even better tailored to their needs.”
Bodo Uebber, member of the Board of Management of Daimler AG for Finance and Controlling and Daimler Financial Services, added: “The new structure involves reassigning more than 700 subsidiaries in over 60 countries. With this new structure we will sharpen our focus, increase entrepreneurial responsibility and protect our synergies and economies of scale.” .png)
THREE-PEAT
Once the new structure has been fully implemented the Mercedes-Benz Cars & Vans division, under the leadership of Mercedes-Benz AG, will have around 175,000 employees worldwide while the Daimler Trucks & Buses division, under the leadership of Daimler Truck AG, will have around 100,000 employees worldwide. Already legally independent, Daimler Financial Services AG will be called Daimler Mobility AG. With around 13,000 employees, this division today already stands for mobility services within the Group.
Three powerful divisions will give the Daimler Group a more flexible and focused structure, it’s claimed.
Daimler AG, the parent company, will exercise corporate governance, strategy and management functions and provide cross-divisional business services, it’s explained. This will also ensure that synergies [between the entities] remain as before. As an operational holding company, responsibility for the funding of the entire Group will continue to lie with Daimler AG, as the only company in the corporate group to be listed on the stock exchange. There are no plans for the corporation to divest individual divisions.
BACK TO THE FUTURE
As the company states, Project Future is part of the ‘5C’ corporate strategy to prepare Daimler for the challenges and opportunities of the new automotive era. With a strong core business (Core), the transition to new technologies (Case), an open and agile culture across the entire company (Culture) and the right structure (Company), the corporation is laying a foundation that will align it even more closely with customer needs (Customers).
The Daimler family of companies is securing the necessary investments in technological transformation and digitalisation and addressing changes in customer behaviour and the volatility of markets, it states.
The one-time costs for the changes in this corporate structure until the year 2020 are expected to be in the high three-digit million euro range, including tax charges arising from the re-organisations required under corporate law. This includes Daimler´s investment in the re-organisation of its global business in international markets.
The implementation of Project Future will also incur additional running costs in the coming years. These will increase until 2020 and peak at an annual amount in the very low three-digit millions of euros, it’s claimed. Comprehensive initiatives will be concurrently introduced to reduce these costs step-by-step and offset them entirely in the medium term.