Daimler Hurt by Dollar but Sees No US Recession
Daimler Chief Executive Dieter Zetsche does not expect the U.S. economy to contract as a result of high oil prices and the real estate crisis.
"I personally do not anticipate a recession in the USA, rather a reduction in growth," Zetsche told reporters in Hamburg on Wednesday evening, adding that the softer demand would impact the U.S. car market.
The CEO also rebutted Wednesday's market speculation that Cerberus, which bought an 80 percent stake in Chrysler from Daimler earlier this year, had called on the German carmaker to extend a $1.5 billion loan.
Nor did he see any advantage were Daimler to sell its 22.5 percent stake in European aerospace group EADS, despite fresh news of Airbus production delays -- this time for its A400M military plane.
Much like EADS, which is looking to find an additional 1 billion euros ($1.5 billion) in savings to compensate for export problems arising from the strong euro, Zetsche said Daimler would have to boost productivity even further to offset the sagging value of the greenback.
He ruled out increasing its procurement in the dollar region or shifting more production to the United States.
Investments to build a second plant in the country could be wasted money if the dollar were to rebound by the time it went onstream, while U.S. parts suppliers were not in good condition due to the crisis among the Big Three domestic carmakers.
Mercedes-Benz already builds 15 percent of its vehicles in its Tuscaloosa plant in Alabama, where it manufactures the GL, M and R-Class models. Daimler has hedged nearly its entire dollar exposure for this year and has said it is more than 60 percent hedged for 2008.