Daily briefing

Daimler’s Dr Z shows how it’s done

2
Source: DPA

Angela Merkel should look to Daimler, a German bellwether and steward of the Mercedes brand, for tips on managing leadership transitions smoothly. Daimler’s boss, since 2006, has been Dieter Zetsche, also known to Americans as “Dr Z” for his character in the tongue-in-cheek commercials Daimler used to run in the US. And Dr Z seems to have figured out how to quit his job and re-enter into an even better one, with minimum fuss.

Mr. Zetsche, aged 65, will resign as CEO next May, six months earlier than planned, to make way for Ola Källenius, aged 49. As a Swede, Källenius will be the first non-German to run the firm. Zetsche will then take a two-year cooling-off period as his contract requires, before returning as chairman of the supervisory board. (If you’re new to the German board system, read this.)

That timing means that Källenius will be nicely broken in and ready for the big restructuring that Dr Z has prescribed for Daimler starting in January 2020. All that is to Dr Z’s credit: He successfully extracted Daimler from its disastrous merger with Chrysler, and he boosted its business in China, but he also missed the epochal industry shift away from gas guzzlers to electric cars, and from human driving to the autonomous sort. Pulling Daimler out of the slow lane in this technological race against the likes of Tesla and Waymo will now be Källenius’s job, but under the fatherly protection of that big walrus mustache. Dr Z: Kudos!

***

There was a time when Recep Tayyip Erdoğan, Turkey’s president, would have flown to meet chancellor Angela Merkel to discuss his country’s eventual membership in the European Union. Nowadays that seems hard to remember, or even to imagine. In recent years, he’s become a bogeyman for Germany’s righteous crowd as he cracks down on judges and journalists and tramples on democracy. He in turn feels dissed by Germany in uncountable ways, and has not been above hurling the epithet “Nazi.”

Now though, with an economic crisis looming at home and other problems, Erdoğan wants a reset. So he’s arriving later today. One awkward matter is the guest list for the state dinner that President Frank-Walter Steinmeier will host for Erdoğan. Some 300 people were invited, but only 120 RSVP’ed Yes. Lots of A-list politicians decided to demonstratively snub Erdoğan by being no-shows. That includes Angela Merkel. (She will still have separate meetings with Erdogan.)

Also this afternoon, by pure coincidence, UEFA, the European soccer association, will announce which country will host the Euro 2024 championship. And it’s down to either Turkey or Germany. Somebody will be celebrating in Germany, and somebody else will be miffed. But who?

***

If you’ve been reading Handelsblatt Global, you know that Germany’s been having some political problems of late (calling them a “crisis” would be excessive). One interesting aspect of this malaise is that it is happening without the excuse of an economic crisis. Far from it: German employment has been booming, tax receipts are gushing, public debts are being paid back.

That’s all in the rearview mirror, however. Through the windshield, the view is different, as Germany’s five leading economics think tanks are reporting today. (The five institutes are Ifo in Munich, DIW in Berlin, RWI in Essen, IfW in Kiel, and IWH in Halle. By tradition they present regular joint reports.)

For the current year, they had forecast GDP growth of 2.2 percent; they’re now lowering that to 1.7 percent. They’re also cutting their forecasts for the coming years. But the real zinger is that a scenario in which Donald Trump declares a full-scale trade war is not yet in these forecasts. “Any escalation of the trade conflict,” the report says, “is likely to trigger a severe recession in Germany and Europe.” You want to see what a political crisis looks like? Wait till you see the current government during an economic downturn.

To subscribe to this newsletter or check out our other newsletters, click here.

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!