Daimler in distress?

April 8, 2010

Should we be surprised that Daimler are already courting another corporate partner? After all, it’s hard to see how the previous relationship with Chrylser could have ended in a worse fashion.

But the simple fact is that the economies of scale in development & production, as well as the increasingly key group CO2 emissions, are just too big to ignore.

However, shouldn’t Nissan-Renault exercise some caution here? In a fairly astonishing case brought in America, Daimler have agreed to pay $185m in fines in order to settle a corruption case that covers at least the last 11 years.

It seems they were systematically handing over cash in exchange for contracts across 22 different countries – including in one particularly impressive case the gift of two armoured vehicles to one individual official in Turkmenistan. How did he manage to hide them? Surely the least subtle instance of company car park one-upmanship – “Nice 3-Series, Murik.. I parked on top of it.”

Everyone involved is terribly impressed with Daimler’s complicity in the investigation and generally seems at pains to point out how lovely they are. [From the Independent article covering the story]: ‘Prosecutor John Darden added that Daimler had “showed excellent co-operation. The company has undertaken an effort to clean its own house. That reflects a serious change of mind on part of Daimler. This deserves credit.’

In as much as they had any real choice, I suppose this does deserve credit.

But according to Deutsche Welle, Daimler gave out about 41m Euros in bribes between ’98 and ’08 – and in that same period “the deals earned the company 1.4bn Euros in revenue and at least 69bn Euros in allegedly illegal profits.”

So a pretty good deal then, albeit a distinctly shady one if it could be described as a policy decision.

On the other side of the fence, Carlos Ghosn – world-acclaimed saviour of Nissan & Renault and general all-round business good egg – once said: “I think that the best training a top manager can be engaged in is management by example. I want to make sure there is no discrepancy between what we say and what we do. […] Don’t believe what I say. Believe what I do.” (Thanks to Leadershipjot.com for the quote)

Hmmm. Do I detect an impending clash of management philosophy? That’s certainly what happened last time – Peter Schneider says that “The Germans [Daimler] found out Chrysler only planned ahead for four months on many issues, whereas the Germans planned ahead for almost 10 years on virtually everything”.

All in all, I can see the proposed partnership between Nissan-Renault & Daimler failing just as spectacularly as the Chrysler relationship did. It might take a while to do so, and actually I really hope it doesn’t – because I admire Carlos Ghosn and what he has achieved. But it’s hard to see how two such apparently distinct company ethoses (ethi?) can be reconciled, just because both parties need to make seatbelts & steering wheels.

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