COMMENT: Unpaid bills and uncovered bills of exchange

COMMENT
Franz W. Rother is Editor-in-Chief of Automobilwoche

The members of DaimlerChrysler's supervisory board will be raising their glasses to Juergen Hubbert at the meeting preceding their general meeting in Berlin on April 6.

Subsequently the shareholders will probably ask a few critical questions regarding Mercedes' drop in profit and the continuous profit problems at Smart. Or maybe they will want to know more about the investigation at the German sales organization's offices in Berlin.

And then they will probably send Hubbert, the former boss of the Mercedes Car Group and chairman of the Executive Automotive Committee, into retirement, accompanied by a huge round of applause.

When, how and in which setting the group will be honoring the 65-year-old engineer has not been decided yet. Officials in Stuttgart say that Hubbert is still thinking about a suitable format.

One thing is for sure, however. DaimlerChrysler will not let Hubbert disappear unnoticed. The Westphalian has been working for the group for 45 years, almost exclusively within the car sector.

He was proud to be called "Mister Mercedes," and rightly so since Helmut Werner left in 1998.

The expansion of Mercedes' model range during his era was unparalleled. He entered new market niches, built a U.S. plant in Alabama, and had Mercedes re-enter Formula One racing.

Under his leadership Mercedes production and unit sales figures rose to more than 1 million vehicles. And after a spectacular turnaround 10 years ago the sector's profit tripled.

There is no doubt that this man, who was awarded a first-class badge of honor by the German government, rendered the company a great service.

But the famous brand with the star also got a few scratches along the way that now must be mended.

According to market surveys such as the industry's internal survey, the New Car Buyer Survey and the J.D. Power report, Mercedes customers' satisfaction dropped steadily during the past few years and the brand's image deteriorated noticeably.

There were clear indications of Mercedes vehicles' reduced reliability primarily due to problems with the electronics three years ago.

However, in his arrogance Hubbert regarded relevant reports in Automobilwoche and other publications almost as a personal insult.

The stir caused by the A class failing the stability probe called the Elk Test and later recall campaigns made Hubbert hypersensitive.

His PR advisors had months of persuading to do until Hubbert started to tackle the quality problem.

The same applied to the cooperation with suppliers who suffered significantly because of his strict austerity measures within purchasing.

The fact that one of his successor Eckhard Cordes' first actions was to put 500,000 euros aside to cover the costs of warranty claims is proof that, despite all reassurances, the quality of Mercedes products is nowhere near perfect.

It also remains to be seen what else the investigations of the sales scandal by the district attorney's office and the internal auditors will uncover.

It might be too early to make a final judgment on Hubbert's era. Some bills have not been paid yet and in other areas there are still some uncovered bills of exchange.

Maybe the group should wait a little longer before giving a farewell party for Hubbert.

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