Daimler’s profit shrinks with €4,9 billion (update)
German carmaker Daimler announced on Tuesday that its net profit has shrunk from €7,6 billion in 2018 to 2,7 billion in 2018, in spite of record sales for its Mercedes-Benz brand and revenue up by 3% to €172,7 billion. Some 2,4 million vehicles were sold under the Mercedes brand, an all-time record.
“While our results in 2019 reflect ongoing strong customer demand for our attractive products, we cannot be satisfied with our bottom line,” chairman and CEO, Ola Källenius, said, according to the German DPA press agency.
Dieselgate and failing airbags
Reasons for the loss of profit for the second year in a row are to be found by costs for government actions and legal procedures in the aftermath of dieselgate and expensive recall of Takata airbags, according to a company statement. And several hundred million euros went into the fusion with BMW’s mobility services.
Meanwhile, the company needs to “adopt and develop new technologies as CO2 neutrality and digitization to secure future business,” he added. Daimlers CFO, Harald Wilhelm, cyphered the costs for the transition of the group up to €2 billion, of which 1,2 million in 2020.
Meeting EU emission standards
Whether Daimler is going to meet the EU’s CO2 standard of 95 grams per kilometer by the end of the year, is something Källenius couldn’t “guarantee”, he told the press, but he said he had “full confidence”. Recent figures speak of 137 g/km for the Daimler fleet at this time.
If EU standards are not met, huge fines are awaiting. Like most other manufacturers, Daimler will have to push as many electric vehicles and plug-in hybrids as possible, as they count double in the CO2 emission calculations over the entire fleet.
Källenius is forcing a strict ‘belt-tightening’ operation within the company to cut personnel costs by €1,4 billion each year until the end of 2022. But “that’s it, it will go no further,” Kâllenius ensured.
The ‘strict diet’ is to be felt by the Daimler employees worldwide, as at least 10 000 jobs are to be lost in the coming years, which may add up to 15 000, according to the German financial newspaper Handelsblatt. At the annual press conference on Tuesday, after the Investors and Analysts Conference, Daimler boss Källenius didn’t want to give any figures.
In Germany, Daimler staff is touched right into their wallets. They are to get a €579 profit share and a one-time bonus of €500. The bonus applies to 130 000 eligible tariff-scale employees in Germany. For 2018, that bonus was still €4 965.