Daimler chief: VW cheating blow to German auto industry

David Shepardson
Detroit News Washington Bureau

Washington — Daimler chief Dieter Zetsche said Thursday that the German automaker has never used illegal “defeat devices” to evade diesel emissions rules — as its rival Volkswagen AG has admitted to doing — and said the scandal is a blow to the German auto industry.

Zetsche told the Economic Club of Washington that Mercedes-Benz has never used software to evade emissions requirements “and we never will.”

Zetsche said he was surprised by VW’s disclosure. He said initially people may have assumed that if one company does, everyone probably does evade emissions rules.

“I think a strength of ‘Made in Germany’ and of the German auto industry is a perception that these are reliable brands and you can trust them and this is a blow to our industry,” Zetsche said. “It’s up to us to rebuild that trust because we haven’t done anything wrong.”

Asked if he thinks VW’s admitted cheating in emissions standards in 11 million vehicles worldwide cost Mercedes-Benz sales, he said no.

He told reporters after the event that it will take time for the German brand to recover from the controversy.

On Monday, the Environmental Protection Agency said its testing of all passenger diesel cars has shown no evidence of cheating in any other automakers, except VW. Zetsche supports the testing but says there is “no suspicion” on EPA’s part that Mercedes-Benz cheated.

On Wednesday, VW issued a stop-sale for Audi, Porsche and VW SUVs and high-end cars with 3-liter diesel engines that have been labeled by federal regulators as having pollution-control “defeat devices.”

VW in Germany on Tuesday announced new problems with carbon dioxide emissions and mileage ratings on 800,000 vehicles, and said the costs of that issue could be $2.2 billion. VW stock fell 10 percent on the news Wednesday. It’s not clear if any of those vehicles are in the U.S., but U.S. VW officials don’t believe so.

Zetsche said he doesn’t expect any massive consolidation in the auto industry. Fiat Chrysler Automobiles NV has pushed for consolidation and suggested a merger with General Motors Co. would make sense. The Detroit automaker has rejected the entreaties. He thinks there will be consolidation in China among many smaller automakers.

Zetsche says Mercedes-Benz will sell about 1.8 million vehicles worldwide this year, and says for the first time it expects to sell more Mercedes-Benz cars in China than in the United States in 2015.

Daimler has been expanding in the Detroit area. Daimler North America said in September it will move its headquarters and 30 additional employees to Farmington Hills in September.

On Nov. 20, Daimler Trucks North America will mark the official production launch of its automated transmission at the company’s Redford facility. Daimler will also announce a new, additional round of money and jobs for a new product, renewing its commitment to the U.S. and the revitalization of Detroit.

In December 2012, President Barack Obama visited the Detroit Diesel Plant to commemorate Daimler’s investment in manufacturing in Redford Township. The company will become the first heavy-duty vehicle automakers in North America to build a fully integrated powertrain from one production facility.

Zetsche bantered with billionaire David Rubenstein, the moderator of a chat, who told him he owns a 20-year-old Mercedes Benz that never has problems.

“We have new ones,” Zetsche retorted.

Zetsche was asked what kind of car he would buy if he couldn’t buy a Mercedes. Zetsche paused and said Aston Martin, but then added: “but I hope I never get in that situation.”

Noting the parade of auto executives that have been grilled on Capitol Hill in recent years, Zetsche said he was happy to be back in Washington to talk to the Economic Club — “and not to a congressional committee.”

Zetsche’s 93-year-old mother only stopped driving her Mercedes-Benz last year, but she still owns it, he said.

Zetsche said he would never run for political office after he steps down as head of Daimler.