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(Fortune Magazine) -- How easy should it be to climb into the back of a Mercedes-Benz wearing ski boots? And how important is it for the quality image of the brand that you can trample with those boots on the car's door frame without the risk of denting it?
At the Stuttgart headquarters of Daimler AG (DAI), the "ski-boot test" is one of dozens of fundamental questions that engineers, designers, and product and procurement managers are poring over in weekly meetings in a third-floor conference room near the Untertrkheim engine plant. It's all part of CEO Dieter Zetsche's (pronounced TSET-sheh, and you may remember him as "Dr. Z") plan to revamp the carmaker, an overhaul he hopes will have a profound influence on the future of the company -- and especially on its beleaguered finances and flagging competitiveness.
Daimler -- which with 2008 sales of $140 billion dropped to No. 23 on Fortune's Global 500 list from the 11th slot -- is in a tough spot. As sales of premium autos have slumped, the automaker has slowed production and sent thousands of its workers home on paid leave. In the last quarter of 2008 and the first three months of this year, the company sold 25% fewer autos and lost $4.8 billion before interest and taxes. At the truck division, which accounts for one-quarter of its revenue, unit sales are down by 40%. The economic downturn is only partly to blame. Daimler's preeminence in the luxury-auto segment is being eaten away by German rivals BMW and Audi (amazingly, Audi has stayed profitable during the crisis).
The man tasked with rebuilding Daimler is a familiar figure to many Americans. Earlier in the decade Dr. Z, who has a Ph.D. in engineering, appeared in TV ads exhorting consumers to buy Chrysler cars. Chrysler was Daimler's problem acquisition back then, and Zetsche was the top manager dispatched to Auburn Hills, Mich., to sort out its troubled operations. He returned to Germany and took over as Daimler CEO in 2006.
In late April, Zetsche unloaded Daimler's remaining 19.9% Chrysler stake, ending a decade-long nightmare for the German company that has cost its shareholders tens of billions of dollars in lost value. These days Zetsche is wary of the spotlight, but behind the scenes he and his team are moving as fast as they can to deal with two existential questions: how to weather the brutal downturn, and how to come roaring out of it with renewed competitive vigor. "In a time of enormous change," he tells Fortune, "we're doing everything to push the pace of progress faster than the competition."
Daimler CEO Dieter Zetsche's plan to fix Mercedes - Jul. 9, 2009
At the Stuttgart headquarters of Daimler AG (DAI), the "ski-boot test" is one of dozens of fundamental questions that engineers, designers, and product and procurement managers are poring over in weekly meetings in a third-floor conference room near the Untertrkheim engine plant. It's all part of CEO Dieter Zetsche's (pronounced TSET-sheh, and you may remember him as "Dr. Z") plan to revamp the carmaker, an overhaul he hopes will have a profound influence on the future of the company -- and especially on its beleaguered finances and flagging competitiveness.
Daimler -- which with 2008 sales of $140 billion dropped to No. 23 on Fortune's Global 500 list from the 11th slot -- is in a tough spot. As sales of premium autos have slumped, the automaker has slowed production and sent thousands of its workers home on paid leave. In the last quarter of 2008 and the first three months of this year, the company sold 25% fewer autos and lost $4.8 billion before interest and taxes. At the truck division, which accounts for one-quarter of its revenue, unit sales are down by 40%. The economic downturn is only partly to blame. Daimler's preeminence in the luxury-auto segment is being eaten away by German rivals BMW and Audi (amazingly, Audi has stayed profitable during the crisis).
The man tasked with rebuilding Daimler is a familiar figure to many Americans. Earlier in the decade Dr. Z, who has a Ph.D. in engineering, appeared in TV ads exhorting consumers to buy Chrysler cars. Chrysler was Daimler's problem acquisition back then, and Zetsche was the top manager dispatched to Auburn Hills, Mich., to sort out its troubled operations. He returned to Germany and took over as Daimler CEO in 2006.
In late April, Zetsche unloaded Daimler's remaining 19.9% Chrysler stake, ending a decade-long nightmare for the German company that has cost its shareholders tens of billions of dollars in lost value. These days Zetsche is wary of the spotlight, but behind the scenes he and his team are moving as fast as they can to deal with two existential questions: how to weather the brutal downturn, and how to come roaring out of it with renewed competitive vigor. "In a time of enormous change," he tells Fortune, "we're doing everything to push the pace of progress faster than the competition."
Daimler CEO Dieter Zetsche's plan to fix Mercedes - Jul. 9, 2009
