Dieter Zetsche, the CEO of both Daimler and Mercedes-Benz, has been the whipping boy of the German premium auto industry for years.
Analysts, fund managers and the media have blamed him for Mercedes’ declining fortunes in relation to the brand’s luxury rivals and many critics are convinced a major part of the problem results from Zetsche splitting his time between his role as CEO of both the group and brand.
Under his watch, the company’s biggest profit contributor, the Mercedes brand, slumped to number three among global premium carmakers behind Audi -- an idea unthinkable when Zetsche was entrusted with the marque in January 2006.
Back then, Mercedes outsold Audi by over a quarter of a million cars and had been industry leader as recently as the end of 2004.
Since then, a string of profit warnings, a scrapped dividend and a surprise stock sale that diluted investor shareholdings have all served to weaken Zetsche publicly, as problems spilled over into the group.
But the CEO continues to refute any connection between the underperformance at Mercedes and him devoting only part of his time to the day-to-day operations of the brand. When critics demanded Zetsche relinquish his post as Mercedes boss to focus on group strategy and begin grooming a successor, he pointed to Volkswagen’s Martin Winterkorn as an example of a successful company led by a manager who is CEO of both group and brand.
So what did Zetsche then think about Winterkorn’s decision in December to delegate future control of the core brand to Herbert Diess, formerly of BMW, in order to “position both the group and the brand atop a broader foundation personnel-wise” as VW phrased it?
Suddenly Zetsche saw little correlation between Daimler and VW, arguing that he still believed he was a better group CEO by remaining involved in the daily operations of Daimler’s most important brand.
“There is certainly a difference between a company like Volkswagen with currently 13 brands and a company like Daimler where the deciding volume essentially comes from one brand,” he told reporters on the sidelines of the Detroit auto show.
“Volkswagen is one comparison, but if you look at BMW, Renault-Nissan, Fiat Chrysler or wherever, the operative responsibility for the main automotive business is always combined with the overall authority. I believe this is a good structure and independent of whatever happens at Volkswagen, I haven’t changed my opinion.”
Zetsche, who turns 62 this May, remains the longest serving CEO of any German carmaker. Yet no clear lieutenant has emerged to replace him. One key board member who was touted as a potential successor, Andreas Renschler, left last year to take over as trucks chief at Volkswagen – a position he already held at Daimler.
While few in the industry believe Zetsche will succeed with his plan to make Mercedes the world’s largest and most profitable premium carmaker by 2020, Daimler’s fortunes of late have changed markedly for the better.
Mercedes sales rose almost 13 percent to a new record last year, a rate of growth that surpassed that of BMW or Audi.
So, can anyone really blame him for wanting to stay on as Mercedes boss and take full credit for the brand’s recent success after all those years of abuse?