#Daimler

When we last reported on France banning some Mercedes-Benz vehicles because the company refuses to use the now mandated R1234yf refrigerant, representatives from all 28 EU member states were scheduled to meet with the EU’s Technical Committee on Motor Vehicles to discuss the matter, particularly as it regards the sale of M-B vehicles in the 27 other EU countries besides France. That meeting has since taken place and according to a memo issued by the European Commission, those representatives have confirmed that all new vehicles sold throughout the EU must use R1234yf, and that any vehicles with the now banned R134a must be withdrawn from the market in all EU states. The dispute is over the fire safety of the new refrigerant. R134a was banned because it is considered a greenhouse gas.

The EU Commission has provisionally sided with France in that country’s decision to stop the sale of new Mercedes-Benz cars because of Daimler’s decision to continue to use R134a refrigerant in it’s HVAC systems. The EU has banned R134a out of concerns for global warming. The only available replacement that meets the new regulations is R1234yf, made by Honeywell, and Mercedes-Benz has insisted that their tests show that the new refrigerant is dangerously flammable and could start an underhood fire under certain conditions. The provisional ruling could be a problem for Daimler in other EU countries.

The fight over the flammable refrigerant takes a new twist. France refused to register Mercedes A-Class, B-Class and SL cars assembled since June 12, even though German authorities have approved them, a Daimler spokesman told Reuters.

“Struggling to match rivals’ scale and efficiency in smaller cars, as well as their success in China, Stuttgart-based Daimler has fallen further behind German peers BMW and Volkswagen,” reports Reuters. Alone by bringing outsourced SAP systems in-house, Daimler wants to save €150 million (nearly $200 million.)

After accumulating some $9 billion in losses, Mitsubishi Motors is bringing its financial house in order. According to Reuters, “Mitsubishi Motors is considering asking shareholders to approve plans for a 10-for-1 reverse stock split. At the same time, the company may ask shareholders to approve a capital reorganization – a change in accounting that would make it possible to resume paying dividends.”

Our cross-cultural adviser, showing a little A-Class

Bloomberg relentlessly covers a fight very few care about: Who sells the most “luxury cars?” Never mind that the only way to win this is to sell more, what do they call them, “approachable” cars. Which Bloomberg’s latest dispatch from the upper class struggle aptly proves.

German autoworkers want their share of the record profits announced by German carmakers last year. IG Metall labor union demanded 5.5 percent. Employers countered with 2.3 percent. Today, workers went on strike.

Daimler’s new China chief Hubertus Troska committed a possibly deadly mistake. According to Germany’s Automobilwoche [sub], Troska and his lieutenant Nicholas Speeks “accuse their Chinese dealers of laziness and incompetence.”

The pendulum swings to the U.S.: As expected, Ford turned in higher-than-expected first-quarter profits today, while in Germany, Daimler’s formerly pornographic profits were slashed in half, and Volkswagen stubbornly maintained its outlook despite declining profits.

The American justice system has shown a large degree of overreach in the not so distant past, punishing or shaking down foreign companies for misdeeds performed on foreign soils by foreign perpetrators on foreign victims. This is not a matter of right or wrong. It is a matter of jurisdiction and sovereignty. Enough is enough, says the U.S. Supreme Court and decided to hear Daimler’s appeal against a decision by a San Francisco court that workers or relatives of workers at an Argentina-based plant operated by Mercedes-Benz, a wholly owned subsidiary of Daimler, can sue for alleged human rights abuses performed by Daimler in the 1970s in collusion with Argentina’s then military junta. Daimler had been on the receiving end of judicial overreach in the past.

At the Shanghai Auto Show, which opens to the public on April 21, and to tens of thousands of alleged members of the media the day before, the child of one of the auto industry’s oddest couples will be shown – at least in prototype form. It is the Denza EV, the product of a mésalliance between the world’s oldest and proudest automaker, Daimler, and a company that entered the annals of contemporary automotive history as the most brazen rip-off artist.

Of course we are talking of BYD, the Shenzhen, China, based maker of half the world’s cellphone batteries and a dwindling number of cars. A while ago, I visited an intrepid team of German engineers, shacked up at BYD, to jointly develop an electric car. They were friendly, hospitable, and as forthcoming as possible under the strange circumstances. For months, I could not bring it over me to put my fellow countrymen and expats in the dim light this story would project. Their job is tough enough. But in the interest of timeliness and journalistic duty, here it goes.

A few months ago, we discussed what Nissan/Renault’s Carlos Ghosn calls a “structural decline” of Europe: Missing car buyers, brought on by a sudden decline of births around 1970. A population peak that now sits smack in the middle of the prime new car buying age, which in most of Europe is between 40 and 60 years, will retire in a few years, throwing Europe’s car industry in turmoil. Daimler, which has some of the oldest buyers, is beginning to feel the pain.

Daimler and Volkswagen reached an agreement over an air-conditioning refrigerant that Daimler claimed was flammable and extremely hazardous to one’s health.

“Dieter Zetsche is lucky that he can stay for three more years,” writes Der Spiegel in Germany. The labor side of Daimler’s Supervisory Board had demanded Dr. Z’s head, the magazine writes. After long debates with Daimler’s Supervisory Board Chairman Manfred Bischoff, a compromise was found.

It is unusual that the supervisory board of a large German corporation denies the dearest wishes of its Management. If the board does not like a wish, the wish usually won’t be rendered in the first place, the tight community of executive assistants will see to it. It would be most unusual that the board denies the wish of its CEO to run the company for another five years. Daimler’s board did the impossible: It denied Dieter Zetsche’s wish for another five-year contract, and gave Dr. Z. three years to get Daimler’s house in order. It’s a mission impossible. The mustachioed will sit out his career as a fall guy.