BERLIN -- Daimler's supervisory board plans to extend CEO Dieter Zetsche's contract to 2019, making it more likely that old-guard executives will lose out to younger managers the next time the post is available.
Zetsche's extension could rule out trucks division head Wolfgang Bernhard, China boss Hubertus Troska and finance chief Bodo Uebber as potential successors. All three will be close to 60 years old in 2019, when Daimler would choose its next chief executive.
As a result, the job is likely to go to a member of a younger generation of managers, including sales chief Ola Kaellenius and two other executives in their late 40s: Markus Schaefer and Klaus Zehender, Mercedes-Benz's heads of manufacturing and procurement, respectively.
Daimler's product momentum, improving profits and the defection of Mercedes production chief Andreas Renschler to Volkswagen have worked in favor of Zetsche, 61, whose contract was extended by a lower-than-expected three years in 2013 under pressure from the company's powerful labor representatives
Daimler Chairman Manfred Bischoff told investors Wednesday at the annual shareholders meeting in Berlin that "it's the unanimous intention of the board to extend Mr. Zetsche's contract for another three years."
Zetsche's term as CEO expires at the end of next year.
Zetsche has been a member of Daimler's management board since 1998. He led U.S. carmaker Chrysler, a division of the German company at the time, from 2000 to 2005. He became head of the Mercedes-Benz car division in September 2005 and succeeded Juergen Schrempp as Daimler CEO three months later.
This time labor representatives will back a new term for Zetsche because "we see the company on a good path," said Michael Brecht, the head of the labor-representative body and vice chairman of Daimler's supervisory board. Labor representatives on the 20-member supervisory board control half the seats, giving them a veto over senior appointments at the Stuttgart-based car and truck maker.
A three-year contract extension would be the second for Zetsche, who is seeking to lift profitability at Mercedes-Benz Cars to levels of competitors. In 2012, He indefinitely postponed a deadline for generating operating margins of 10 percent of sales at the unit, which also includes the Smart small car brand. The target was originally supposed to be reached in 2010.
Zetsche outlined a medium-term goal on Wednesday for a return on sales of 9 percent at Daimler's vehicle-manufacturing businesses after generating a margin of 7.8 percent in 2014.
Zetsche has vowed to return Daimler's Mercedes car brand to the No. 1 spot in global luxury-car sales that it lost to BMW in 2005. Audi has been the world's second-biggest manufacturer of premium cars since 2011.
Bloomberg and Reuters contributed to this report