Daimler’s CEO warns electric car shift will be painful
After two rapid-fire profit warnings earlier this year, Ola Kallenius said that the German icon’s earnings would remain under pressure for the next two years.
Daimler AG’s new chief executive officer warned there will be no quick fix for the automaker’s struggle to revive squeezed profit margins during a costly shift to electric and self-driving cars.
After two rapid-fire profit warnings earlier this year, Ola Kallenius said on Thursday that the German icon’s earnings would remain under pressure for the next two years. The Swede laid out a plan to gradually lift margins by capping investment and cutting jobs to save more than 1.3 billion euros ($1.4 billion).
“To remain successful in the future, we must therefore act now and significantly increase our financial strength,” Kallenius said in his first big major strategy presentation since taking charge in May. “Comprehensive measures to increase efficiency” are needed “in all areas.”
The expensive transition to electric vehicles is colliding with legacy diesel issues and trade disputes to put pressure on the maker of Mercedes-Benz vehicles. Kallenius’s response failed to win over skeptical investors. The stock fell as much as 4.7%.