Coronavirus crisis: “Daimler does not need state aid,” says CEO Ola Källenius

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Daimler, the parent company of Mercedes-Benz, does not yet need state aid from the German government in the coronavirus crisis, says CEO Ola Källenius, in a telephone conversation lasting over an hour with German newspaper Handelsblatt.

Earlier on Monday, the German government announced it would earmark € 156 billion to combat the economic consequences of the coronavirus outbreak. But, Källenius wants to bring the Stuttgart-based carmaker through the corona crisis with the greatest possible flexibility and solidarity. “The auto industry has generally recorded very good orders ahead of the coronavirus outbreak. In times of the pandemic, society must stick together,” he said.

Källenius says right now direct financial injections from the federal government are excluded. “Daimler currently does not need state aid. We are solidly equipped with a high level of liquidity.” Daimler’s CEO also announces that he wants to shorten the working hours of his production employees. “In Germany, politics is reactivating the regulation on short-time work, and we will use it then.”

Even so, bank loans could still be possible. According to Bloomberg, Daimler is negotiating with different banks for a loan of around 10 billion euros, which will help the group to cope with the crisis of this period. The announcement of the loan contract is expected to be made next week.

Although the Mercedes manufacturer had to stop its production in Europe and parts of North America, the jobs of the approximately 300,000 employees are not in danger, Källenius assured. “The safety of the jobs is not under discussion.” Daimler’s factories in Europe are largely shut down. Production in the US state of Alabama, where the successful Mercedes SUVs are rolling off the production line, will soon also be temporarily halted. In China, however, work is already being restarted, as we reported last week.

Coronavirus: Daimler optimistic, reopens factory in China

Daimler had to postpone the Annual General Meeting, which was originally scheduled for early April, into the summer, but the shareholders of the Group should then, as planned, receive a profit sharing of 90 cents per share for the 2019 financial year. “Our proposal for a dividend has been made and there is no reason to change anything at this point,” said Källenius.

One Comment

  • Silas chibuzor says:

    I love ola k. He is so on point with his leadership and managerial styles…