New driver

Daimler CEO Zetsche resigns, Swedish executive Källenius named successor

Unbenannt
The new man in charge. Source: AFP

Once celebrated like a pop star, Dieter Zetsche will resign in May next year, handing over the wheel of luxury carmaker Daimler to Ola Källenius, a 49-year-old Swede. Mr. Zetsche, a 65-year-old who often shows up in jeans and sneakers, is set to become Daimler’s non-executive chairman in 2021, the company said in a statement.

Mr. Zetsche’s term as CEO was originally scheduled to run until the end of 2019, but Daimler decided to end it early, in order to make him chairman in May 2021. German corporate governance rules require a two-year, cooling-off period before executives can join the non-executive supervisory board. This German-specific board monitors the company’s management team, approves strategy changes and dividend payments.

The nomination of Mr. Källenius, currently responsible for group research and development at Mercedes-Benz Cars, as Mr. Zetsche’s successor, was expected. The manager with a finance degree has worked at the world’s largest maker of luxury cars since 1993 when he started as a trainee. He quickly climbed the ranks with posts in the United States, Germany and Britain. In 2015, he was made an executive board member and was considered to be Mr. Zetsche’s crown prince.

Thanks to his life-long career at Daimler, Mr. Källenius has ample support among its workforce. “One can only respect the man. He acts quickly, transparently and has a vision,” said one manager, who backs the new boss. “He has a sense of what is truly important and the sensitivity to understand the employees.”

04 p07 P&L Check Daimler 2-01

A new leader for a transforming industry

Mr. Zetsche, who has been credited with propelling Mercedes-Benz ahead of BMW as the top luxury carmaker, and the current non-executive chairman, Manfred Bischoff, 76, have been grooming Mr. Källenius and other managers for years to usher in a generational change. Daimler said in the statement it brought forward the management changes “in view of the challenges presented by the transformation of the automotive industry.”

Daimler, which is also the world’s largest truck maker, was late in making attractive electric cars capable of competing with Tesla. Although the carmaker was already mass-producing electric Smart cars in 2009 and was a Tesla investor between 2009 and 2014, none of its electric models gained traction like that of Tesla’s Model S and Model X. Daimler’s first car that could compete against Tesla, an SUV named EQC, will go on sale next year.

Mr. Källenius will be the one steering the company, which had €164 billion ($193 billion) in sales and sold 3.3 million vehicles last year, into an era of electric and self-driving cars. He will also work with a Chinese shareholder and deal with VW’s Dieselgate legacy: Daimler, too, is under scrutiny from German and US regulators after the latter found suspiciously high emissions levels in some diesel cars. The carmaker always denied manipulating vehicles the way VW did but recalled close to one million vehicles in Europe earlier this year. The affair is a stain on Mr. Zetsche’s otherwise impeccable reputation.

As the company’s new CEO, Mr. Källenius will also make crucial decisions about the future of the carmaker, which dates back to 1885, when Karl Benz invented the first motorized passenger car. Daimler is considering separatings its car and vans, bus and truck, and finance businesses into legally distinct units. This could herald a breakup of the group.

Gilbert Kreijger is an editor with Handelsblatt Global. Markus Fasse and Franz Hubik contributed to this article. To contact the author: kreijger@handelsblatt.com

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