Bernhard moved from Mercedes cars to Daimler Trucks
Renschler will take over as car unit's production and purchasing chief
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Daimler CEO Zetsche, left, will serve 3 more years. Bernhard, right, will head the company's trucks division. Photo credit: Reuters |
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MUNICH -- Daimler swapped the roles of Mercedes production and purchasing chief Wolfgang Bernhard and Daimler Trucks head Andreas Renschler at a supervisory board meeting on Thursday. The board also extended CEO Dieter Zetsche's contract until the end of 2016.
Renschler, 54, will move to head Mercedes production and purchasing on April 1 when Bernhard, 52, will become boss of the trucks division, Daimler said in a statement.
"The role swap is likely to confirm Bernhard and Renschler as the front-runners to take over from Zetsche in three years," Morgan Stanley said in a note to investors.
Roman Mathyssek, an analyst at IHS Global Insight, said the chances that Bernhard could succeed Zetsche as CEO had increased further with the announcement. "There's an unwritten law at Daimler that the CEO has to prove himself at the truck division," he said.
Daimler is giving Zetsche, 59, three more years to put the company on track to become the world's biggest premium carmaker by 2020. Zetsche has been Daimler CEO since 2006 and his new contract potentially makes him one of the company's longest-serving CEOs.
Analysts said the decision to extend Zetsche's contract showed a lack of alternative candidates. The move came despite growing criticism from the financial markets that rivals BMW and Volkswagen's Audi are winning the race for global leadership at Daimler's expense, particularly in China.
Supervisory Board Chairman Manfred Bischoff said: "The long-term orientation of the group's leadership is an essential factor for Daimler's sustained success." Zetsche's prolonged contract helps maintain "the important continuity at the top executive level, Bischoff said in a statement.
Bernhard will head Freightliner
Bernhard will be taking charge of the Daimler division that includes the Freightliner commercial-vehicle brand in the U.S. and Fuso in the Japan, in addition to Mercedes-Benz heavy vehicles built in Europe and Brazil. He returned to Daimler in 2009 after a five-year absence that included a stint at Volkswagen, and took the Mercedes car division's production post in 2010.
Renschler has overseen the truck business since October 2004, managing the division's investments in emerging markets such as Russia and India. His work at the Mercedes car unit, which Zetsche leads, will involve implementing efficiency measures at a division that has a goal of cutting 2 billion euros ($2.64 billion) in spending by 2014.
Zetsche's three-year contract extension is shorter than the five-year renewals common in German industry. Volkswagen prolonged CEO Martin Winterkorn's term by five years in 2011 and BMW approved a similar extension for CEO Norbert Reithofer in September 2010.
Two sources familiar with the matter told Reuters on that the supervisory board decided at the last minute to grant Zetsche only a three-year deal in a bid to calm critics. "A three-year contract makes sense," said Daniel Schwarz, an analyst at Commerzbank. "If Mercedes is going to close the gap to BMW and Audi, then results of Zetsche's efforts should be evident by then. A five-year contract could have been seen critically by some investors."
A Daimler spokesman said: "The supervisory board is acting in accordance with good corporate governance rules, which imply that board members who are 60 years old or turn 60 during their tenure get a contract extension of three years instead of five." Zetsche turns 60 in May.
Chrysler leadership
A member of Daimler's management board since 1998, Zetsche was CEO of U.S. carmaker Chrysler, a Daimler unit at the time, from 2000 to 2005. Bernhard served as chief operating officer at Chrysler between 2000 and 2004.
Zetsche became head of the Mercedes-Benz car division in September 2005 and succeeded Juergen Schrempp as Daimler CEO three months later.
Zetsche has largely stripped the company of Schrempp's legacy, initiating Chrysler's separation in 2007. He decided in 2011 to discontinue the ultra-luxury Maybach brand and set in motion Daimler's exit from European Aeronautic Defence & Space Co., the parent of planemaker Airbus that Daimler helped found, with the sale of a 7.5 percent stake in December.
 | Renschler will have to reduce costs at Mercedes. |
Some analysts were skeptical about the top-level changes. "Senior management change in Mercedes at this critical phase may do little to improve investor confidence in the turnaround story," Morgan Stanley's specialist sales team wrote.
It said skepticism toward Renschler remains high because of the lack of good results at the trucks division in recent years. His move to the cars unit will not immediately inspire "confidence in his ability to oversee and turn around Mercedes," Morgan Stanley wrote. It added that Bernhard is well respected by the market, but is perceived as the "light vehicle" guru so his appointment run the trucks business is surprising.
Credit Suisse analyst Erich Hauser said: "I have the feeling that the Daimler board is a old boys' club where the members want to avoid doing any harm to each other. They just see a company that is selling more cars than ever before and don't really grasp the urgency to act."
Daimler also prolonged the contract of Thomas Weber, head of research and development, through 2016. Weber, 58, was promoted to Daimler's management board in 2003 and has been responsible for r&d since May 2004.
Daimler is forecasting that earnings before interest and taxes from ongoing business in 2013 will remain unchanged from last year, when operating profit dropped 10 percent to 8.1 billion euros ($10.7 billion).
No. 1 goal
Zetsche vowed 18 months ago to return the Mercedes brand to its No. 1 rank among luxury carmakers. Since then the division has fallen further behind BMW and Audi in global sales. BMW overtook Mercedes as the world's biggest luxury-car brand in 2005. Audi, building on a presence in China, has been in second place since 2011.
Zetsche has outlined plans to roll out 13 new vehicles without predecessor models over the next eight years and to fix a disjointed sales strategy in China. The CEO is working to balance the costs of adding the new models, such as the new CLA coupe and a compact sport-utility vehicle, with efficiency measures to cut spending by 2 billion euros at the car division by the end of 2014. He's targeting rising profit starting next year.
Reuters and Bloomberg contributed to this report
You can reach Paul McVeigh at pmcveigh@crain.com.
