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Daimler names R&D head Ola Kaellenius next CEO

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Old 09-26-18 | 11:42 AM
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Default Daimler names R&D head Ola Kaellenius next CEO

Zetsche to become chairman




FRANKFURT — Daimler named research chief Ola Kaellenius as its next CEO on Wednesday in a succession plan that promotes a raft of tech-savvy managers at its Mercedes-Benz car brand and also seeks to install long-serving CEO Dieter Zetsche as chairman.

The German automaker said the plan would provide certainty on future leadership at a time of upheaval in the car industry, though some commentators questioned an arrangement they said could leave Zetsche as a back-seat driver.

Daimler said the 49-year-old Kaellenius would become chief executive in 2019 and the 65-year-old Zetsche would, if shareholders approve, become chairman of the supervisory board in 2021, following a standard two-year cooling off period.

The elevation of Kaellenius, a Swede who often wears jeans and sneakers and attends tech conferences, marks the first time the 132-year-old Stuttgart-based inventor of the modern automobile will be headed by a non-German CEO without an educational background rooted in mechanical engineering.

Currently Head of Group Research and Mercedes-Benz Cars Development, Kaellenius has helped Zetsche prepare for a new era of developing electric and self-driving cars at a time when Germany's auto industry faces competition from new rivals like Waymo, Tesla, Byton and Nio emerging from the technology sector.

"With Dieter Zetsche's intended appointment as Chairman of the Supervisory Board, we are ensuring continuity for the sustained success of Daimler AG," Daimler's current chairman Manfred Bischoff said in a statement.

"In Ola Kaellenius, we are appointing a recognized, internationally experienced and successful Daimler executive."


Clarity on succession

Zetsche, with his distinctive white mustache, took the helm at Daimler in 2006 and oversaw the launch of a string of new models that helped Mercedes to eventually overtake German rivals BMW and Volkswagen's Audi to become the world's biggest premium carmaker by sales in 2016.

Kaellenius joined the company as a trainee in 1993. With a qualification in finance and accounting from the University of St. Gallen in Switzerland and international management from the Stockholm School of Economics, Kaellenius has worked to introduce Silicon Valley management techniques at the carmaker.

Together with Zetsche he oversaw an effort to sweep away layers of bureaucracy and encourage a more experimental approach to new products, changing a culture often stymied in strict hierarchies and meticulous planning.

A major change at Daimler is to empower low level employees to generate business ideas and to allow departments to fund an idea even if it is not clear what products will result from the spending. Having a perfect "specification sheet" used to be a precondition for any investment.

Daimler said Zetsche would step down from his positions on Daimler's management board and as head of Mercedes-Benz Cars, effective at the end of the annual shareholders' meeting on May 22, 2019, and Kaellenius, would then be appointed as CEO.

"It is good that Daimler is providing clarity on the succession issue early on," said Ingo Speich a fund manager at Union Investment.

Daimler said two strategy and technology executives would also take over roles previously held by experts in mechanical engineering. Wilko Stark, until now head of Daimler Strategy and planning, will become Head of Mercedes-Benz Cars Procurement and Supplier Quality on Oct. 1.

Sajjad Khan, currently Head of Digital Vehicle & Mobility, will take over management of Daimler's connected autonomous shared electric (CASE) and Electric Vehicle Architecture (EVA) organization.

Markus Schaefer, currently head of Production and Supply Chain Management, who has transformed Daimler's Mercedes factories by linking them up digitally, will succeed Kaellenius as Head of Group Research and Mercedes-Benz Cars Development.
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Old 09-27-18 | 11:50 AM
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Default Daimler's new CEO adds youth and an international flair to Mercedes

Something new

FRANKFURT — Daimler's appointment of company veteran Ola Kaellenius to become chief executive from next year signals a cultural shift by the world's oldest carmaker as it takes on new rivals from the tech sector.

A 49-year old Swede, Kaellenius is the first non-German CEO to head up the 132-year-old Stuttgart-based inventor of the modern automobile. He also lacks an educational background in mechanical engineering.

With his international experience he embodies a more informal leadership style as Daimler seeks to embrace Silicon Valley management tactics to compete with tech rivals like Waymo and Byton in a race to put self-driving cars on the road.

"The hearts of our vehicles used to be drivetrains, in the future it will be their hard drives," Kaellenius said in a speech at the Consumer Eletronics Show in Las Vegas this year, an appearance which appeared to signal that he represented the new face of high-tech Mercedes-Benz.

Like Dieter Zetsche, who is set to take over as Daimler's chairman in 2021, Kaellenius excels at impressing international audiences. His polished but casual approach — with no suit or tie — echoes a management style more at home in California than Germany.

Kaellenius joined Daimler as a trainee in 1993 and moved to work in corporate controlling at Mercedes-Benz in Tuscaloosa, Alabama, before further postings at performance division Mercedes-AMG. He became a management board member for Mercedes-Benz Cars Marketing and Sales in 2015.

Critics say his emergence as Zetsche's heir apparent in the past two years has happened when Mercedes-Benz has enjoyed record sales and profits, sparing Kaellenius and Daimler's management board fights with labor representatives.

Mercedes-Benz overtook BMW to become the world's biggest selling luxury car brand in 2016.

Kaellenius did restructure the Mercedes dealership network, but critics say this happened when vehicle deliveries reached record levels, reducing the need for painful cuts.

"Until now cooperation with Ola Kaellenius and labor representatives has remained constructive and we therefore expect it to remain that way in this new constellation," Daimler's works council chief Michael Brecht said.

Kaellenius does have his work cut out for him. Daimler issued a profit warning earlier this year, hit by the rising cost of trade tariffs and problems getting the Mercedes vehicle fleet to conform to stricter anti-pollution standards.

Global auto sales are starting to wane and industry profits are being crimped by heavy investments into electric cars.

Daimler now faces scrutiny from regulators and prosecutors about diesel pollution as part of a broader clampdown on toxic fumes which has seen customers shun diesel cars, leaving German workers worried about jobs tied to engine assembly.

In 2013, labor leaders, who command half the seats on the company's board of directors, opposed deeper restructuring measures and forced Zetsche to reassign cost-cutting specialist Wolfgang Bernhard as a condition for extending his contract as CEO.

Zetsche did push through several restructurings in the last decade to try to restore the premium status of the Mercedes-Benz brand in the wake of an expensive merger with mass market manufacturer Chrysler.

Kaellenius, who has a qualification in international management from the Stockholm School of Economics, and experience in the United States, has introduced Silicon Valley management techniques at the carmaker to speed up the pace of innovation to keep up with the software industry.

Currently Head of Group Research and Mercedes-Benz Cars Development, Kaellenius has helped Zetsche to sweep away layers of bureaucracy and encourage a more experimental approach to new products, changing a culture of strict hierarchies and meticulous planning.

"Kaellenius has been crown prince for a while, and he represents change. He is young, intelligent, has a good management style and is simply a different kind of animal from many other top managers in the auto industry," Juergen Pieper, an analyst with Bankhaus Metzler said.
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