Research Chief to Be Next Daimler CEO

Ola Källenius, in succeeding Dieter Zetsche, would become the car maker's first non-German CEO.

 BERLIN—Mercedes-Benz owner Daimler AG said longtime Chief Executive Dieter Zetsche would stand down next year and be succeeded by its research-and-development chief, who has been leading the car maker's push into electric vehicles and self-driving cars.
 The appointment of Ola Källenius marks a changing of the guard at the German auto maker at a time when its sales have slowed and, like much of the car industry, it grapples with technology-driven changes and a fragile global economy.
 With that challenge in mind, several auto makers have turned to younger executives, closer in age to a new generation of customers who have grown up with the internet.
 Mr. Källenius, a 49-year old Swede, would be the first non- German to run Daimler. He succeeds Mr. Zetsche, 65, who with his 12 years as CEO is one of the longest-serving leaders in the industry. Mr. Zetsche will join Daimler's supervisory board and is expected to become its chairman after a mandated two-year cooling-off period.
 Mr. Källenius had been viewed by analysts as a likely CEO since he was promoted to Daimler's executive board in 2015. He joined the company as a management trainee in 1993 and has held various executive positions in the U.S. and Germany. He also has experience in the performancecar business with stints at McLaren Automotive Ltd. and Daimler's Mercedes-AMG GmbH.
 Daimler Chairman Manfred Bischoff praised Mr. Källenius as a “recognized, internationally experienced and successful Daimler executive.”
 Mr. Källenius was also welcomed by Carlos Ghosn, chief of the Renault-Nissan-Mitsubishi alliance, which also maintains an alliance with Daimler for sharing engines and technology. Mr. Ghosn, who has had a close working relationship with Mr. Zetsche, said Mr. Zetsche was “rightly admired across the automotive industry” but that the change of CEO at Daimler wouldn't affect their partnership.
 Arndt Ellinghorst, an auto analyst with the brokerage Evercore ISI, said Mr. Källenius “is a charismatic and fresh leader and understands Mercedes Cars very well,” but added: “He will need to spend a lot of time dealing with the other businesses and, importantly, shareholders.”
 The new CEO is set to take over as Daimler faces a number of challenges. Revenue growth has slowed considerably, rising 1% to €80.5 billion ($94.52 billion) in 2018's first half, while earnings before interest and tax plunged 21% to €5.9 billion.
 Daimler warned earlier this year that earnings would be hampered as a result of global trade disputes and rising costs to meet tougher emissions standards in Europe and to develop technology for electric vehicles and self-driving cars.
 The company is also preparing a major reorganization next year that will split its operations into three business units — trucks, cars, and new businesses such as car-sharing — a move that analysts say could lead to one of the divisions being spun off.
 Daimler also must deal with Li Shufu, the Chinese billionaire who stunned the company earlier this year by amassing a 10% stake in the auto maker. Mr. Li controls Zhejiang Geely Automotive, a fastgrowing company that is eager to become China's first global auto manufacturer. He has maintained a hands-off strategy with Daimler, but he and Mr. Zetsche have been engaged in talks about developing joint projects.
 “The big issue for Daimler is Li Shufu,” said Ferdinand Dudenhöffer, director of the Center for Automotive Research at the Duisburg University. “How will they deal with China and Geely?”  



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