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Daimler Commits $85B to Electrification and Digitalization

Dec. 8, 2020
Directors of the Mercedes-Benz and Daimler Trucks parent committed to cut R&D and CapEx, but agreed to safeguard employment during a five-year “transformation.”

Daimler AG is cutting R&D and capital investment but has committed more than €70 billion (est. $85 billion) to speed up its “transformation towards electrification and digitization.” Daimler directors have approved a five-year plan to achieve “targeted profitability,” also agreed with the group’s employees’ General Works Council to invest €1 billion ($1.2 billion) through 2025 in a “transformation fund”, mainly to promote “further development of future technologies and to safeguard employment during the transformation.

"We want to push ahead faster in particular with electrification and digitization,” stated Ola Källenius, chairman of Daimler AG and Mercedes-Benz AG: He then described the transformation funds as “fulfilling our shared responsibility to actively shape the transformation of our company. Improving our profitability and targeted investment in Daimler's future go hand in hand."

As explained in an October Strategy Update, Daimler plans for Mercedes-Benz Cars' R&D expenditures and CapEx to decrease during 2021-2025, and for those outlays to be more than 20% lower in 2025 than in 2019.

Also, the group expects that within this five-year period Daimler Trucks will accelerate its plans for “emission-free transportation.”

"After controversial discussions in recent weeks, we have achieved that, in addition to the Daimler investment plan, a transformation fund of €1 billion is to be established,” commented Michael Brecht, chairman of the General Works Council of Daimler AG.

“The General Works Council has called for this transformation fund in order to enable additional investment in the ongoing development of our sites,” Brecht continued. “In this way, we can mitigate the disruption of the transformation and send an important signal to our colleagues. The additional funding gives us more opportunities to implement new technologies and products in our plants, thus protecting jobs and know-how. The fund is therefore an important element to make the transformation at Daimler a fair one."

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