Automotive   |   Mercedes-Benz Group AG
DAIMLERBENZ  
Positioning for the future  
We encounter products of the Daimler-Benz group every day.  
Their identity, however, is not always as apparent as that of the  
cars bearing the Mercedes star. Usually it would take a look  
behind the scenes to recognise AEG Daimler-Benz Industrie's  
microelectronics, rail systems, energy systems technology or  
automation technology; the same applies to the products and  
systems of Deutsche Aerospace and the services of debis.  
We often make use of them without realizing who is behind them.  
Daimler-Benz is an integrated technology group with  
extensive competence in the field of transportation and traffic  
systems. We are also active in fields interlinked by common  
technologies and system structures. The common foundations of  
the corporate units, their structures and the forms of cooperation  
are part of the distinctive corporate identity of Daimler-Benz.  
Similar to some of our products, our corporate units do not always  
draw attention to themselves. To give you more of an insight into  
Contents  
The Corporate Principles of  
Daimler-Benz  
2
3 Daimler-Benz Highlights  
4
6
Letter to the Stockholders  
and Friends of our Company  
Board of Management  
"your" company than mere statistics and balance sheets can  
provide and, above all, to show you how we are positioning for  
the future - we have given our annual report a new look.  
8 Report of the  
Board of Management  
8
1
Business Review  
4 Operating Activities of the Group  
2 Central Corporate Functions  
4
6
2 The Daimler-Benz Share  
6
5 Discussion and Analysis of the  
Financial Situation  
7
9
4 Financial Statements  
5 Proposal for the Allocation of  
Unappropriated Profit  
9
9
9
6 Supervisory Board  
8 Report of the Supervisory Board  
9 Directors and Daimler-Benz Group  
Representatives  
1
00 Principal Subsidiaries and  
Affiliated Companies  
1
02 Daimler-Benz in Figures  
The Corporate Principles of Daimler-Benz  
Our work at Daimler-Benz serves  
people and their environment.  
We aim to offer the world's most  
advanced products, systems and ser•  
vices.  
We aim to learn better and faster  
Our core businesses include  
than our competitors. To achieve  
this, we need not only flexible organ•  
izational structures but also em•  
ployees who think entrepreneurially.  
Key to our success are employees  
vehicles for passenger and freight  
transportation, rail systems, aerospace,  
propulsion systems, defense systems,  
automation, energy systems tech•  
nology, and information-technology  
services. In these areas, Daimler-Benz  
This requires a continual committ•  
ment to technical, business, and social with a sense of responsibility, inde•  
innovation as well as a corporate cul•  
ture characterized not by compla•  
cency, but by creative unrest.  
In a world increasingly complex,  
with promising opportunities - but  
also risks - even minor events can  
take on consequences of major propor•  
tions. Therefore, we must carefully  
weigh our every action.  
pendence, creativity, drive, teamwork, strives to be a world leader.  
and openness to new ideas. We there•  
fore promote every employee's per•  
sonal development to the best of our  
abilities.  
Furthermore, we are active in cer•  
tain specialized areas, such as applied  
microelectronics, selected financial  
services, and countertrading, where  
we aim to be highly competitive. To a  
great extent, these activities interlink  
our core business areas.  
i Daimler-Benz does business in  
all corners of the globe. We are  
convinced of the advantages to every•  
Each of our business areas falls  
We owe it to future generations to one of open trade borders throughout  
under the responsibility of one of our  
use our natural resources prudently  
and sparingly. This sense of respon•  
sibility must be reflected in all our  
the world. Therefore, we view competi• four corporate units. Thus, Mercedes-  
tion as a welcome proving ground. The Benz, AEG Daimler-Benz Industrie,  
measure of our success is the recogni• DASA, and Daimler-Benz InterServices  
thoughts and activities throughout the tion our work receives, and economic  
(debis) work together under the um•  
brella of Daimler-Benz, the managing  
holding company of our group.  
Group.  
success is an undeniable part of this  
recognition.  
Our customers are the focus of  
Inherent to our philosophy is re•  
spect for other cultures. As an interna•  
tional company, we reject all forms of  
discrimination. This principle applies,  
moreover, to the filling of management  
our efforts. We must strive not  
just to meet their expectations, but to  
exceed them. Cooperation and the  
open exchange of know-how through•  
Our cooperation aims to:  
Combine know-how and experi•  
ence to create new dimensions  
- Responsibly promoting prog•  
ress for everyone  
out all areas of our companies are cen• positions, where we will extend equal  
tral to meeting this goal.  
opportunities to every employee  
regardless of nationality.  
Just as we are accountable to our  
customers, we are equally responsible  
to the companies' owners as well as to  
the public. This means we must be  
willing to provide feedback to others  
and to assess ourselves openly and  
honestly.  
We are proud to continue a distin•  
guished tradition guided by these prin•  
ciples.  
Daimler-Benz is an integrated  
technology group. This means  
that our various business areas are  
linked by cross cutting technologies  
and system structures. We place a  
special emphasis on our know-how  
and experience in traffic management  
systems and transportation technolo•  
gies.  
2
The Corporate Principles of Daimler-Benz  
Daimler-Benz Highlights  
Daimler-Benz Highlights  
3
It is our intention to set new stand•  
ards in the quality and content of our  
company reports. As an international  
corporation, we wish to provide our  
We do, however, expect the eco•  
nomic recovery, which began taking  
shape during the last quarter of 1993,  
to continue in 1994. During the last  
cially during the latter half of 1993,  
have allready been reflected in sub•  
stantial success. We are optimistic  
that this decidedly positive trend will  
continue as we broaden and renew our  
product ranges; particulary at the car  
and commercial vehicle divisions of  
investors, customers and suppliers the four years, we have built the right  
world over, as well as our employees,  
with the highest possible standard of  
information. Accordingly, we submit  
this annual report to all those who  
have links with our company and un•  
foundations to benefit from this up•  
turn. In view of the declines suffered  
in nearly all our fields of business dur• Mercedes-Benz, we are very convinced  
ing 1993, this may seem presump•  
tuous. However, my colleagues and  
derscore why those links will continue I are convinced that these difficult  
that we can, through internal growth,  
reach our demanding goals using our  
own resources.  
to be rewarding.  
times have confirmed just how  
healthy the basic substance of  
This is consistent with the fact  
that, like other industrial manufac•  
1993 was an extremely difficult  
year, not only for Daimler-Benz.  
Moreover, while the first signs of the  
end of the deep economic recession  
are beginning to appear, we cannot  
expect a significant upturn in most of  
our main markets before the end of  
this year at the earliest. The role  
which the unsatisfactory development  
of wages, and monetary policy have  
played in this is largely undisputed.  
Conditions have not improved in  
other areas as well. This also applies  
Daimler-Benz really is. We possess the turers, we are reviewing possible  
vitality and potential to assure a  
healthy future for our company in  
spite of the difficulties we have all  
endured.  
We have decided to propose the  
payment of a dividend in the amount  
of DM 8. Against the background of  
business trends, and in view of the  
considerable burdens we have placed  
on our employees, many people may  
consider it more appropriate not to  
areas of cooperation with both compet•  
itors and suppliers in sectors periph•  
eral to our core production activities.  
Indeed alliances, joint ventures and  
new forms of cooperation will remain  
on the agenda not just in this year but  
also in the years to come.  
Proud as we are of increasing pro•  
ductivity, we are not blind to the fact  
that our competitors are also devoting  
enormous effort, to improving effi•  
ciency and lowering costs. This means  
that we must, and will, take further  
measures. At times, these steps may  
seem unconventional, and will involve  
labor, and increasingly, capital. It also  
means that we must continuously re•  
view the locations of our operations to  
determine if they are compatible with  
an internationally competitive produc•  
tion structure. The first consequences  
to government policy on purchasing as pay a dividend this year. However, we  
well as on the public sponsorship of  
research and development, especially  
in defense technology and the aero•  
believe our proposal to be appropriate  
because we want our sharholders to  
benefit from the long-term earnings  
space industry. This is despite the fact potential of Daimler-Benz which con•  
that these key technologies for the fu•  
ture are needed more than ever if we  
are to secure competitiveness - and  
therefore also jobs - both in Germany  
and throughout Europe.  
tinues to be very promising.  
Productivity and efficiency in the  
entire group, with regard to both labor  
and capital, have increased signifi•  
cantly. The extensive and continuing  
improvements made in all areas, espe• of this scrutiny, such as the closure  
and amalgamation of individual loca•  
tions, have already been widely  
reported.  
4
Letter to the Stockholders and Friends of our Company  
We will resolutely continue to  
globalize our activities to attain the  
best positions on the world markets of  
tomorrow. We shall also continue to  
focus the core capabilities of our inte•  
grated technology group on the mo•  
bility of people and products. This ap•  
proach is exemplified by the strategic  
We will continue to work reso•  
Due to a high level of non•  
lutely and rapidly to ensure an optimal recurrent expenditures again this  
alignment of our areas of operation.  
This can be accomplished with a high  
degree of precision, now that we have  
improved and refined our internal  
planning and control mechanisms.  
In the future, it will enable us to  
year, 1994 will not be easy. Even so,  
we are expecting a significant im•  
provement. By 1995, we will once  
again be able to speak of an overall  
satisfactory trend in our earnings.  
We are convinced that you, our  
restructuring of AEG Daimler-Benz In• incorporate some important aspects  
stockholders, will not be disappointed.  
You can place your trust in this com•  
pany, because it is well prepared for  
the future. Through our work over the  
last few years, and thanks to the re•  
sources and motivation of the men and  
women working for your company, we  
have created the potential for world•  
wide growth, potential which others  
can only envy. This is true not only of  
our areas of individual activity, but  
also - and increasingly - of our capa•  
bility to combine the knowledge at our  
disposal and to provide integrated  
systems solutions.  
dustrie. The future main focus of this  
company will go well beyond electrical  
of the shareholder value concept.  
This does not represent a break  
and electronic engineering. Our corpo• with our long-term philosophy of re•  
rate unit's traditional areas of busi•  
ness will, in the future, be comple•  
mented by a Diesel Engines field of ac•  
tivity, uniting certain activities of MTU  
Friedrichshafen and of Mercedes-Benz  
AG. AEG Daimler-Benz Industrie will  
also assume central responsibilities in  
the area of microelectronics, which is  
of paramount importance for the inte•  
gration of the group. In the other fields  
of activity of this corporate unit, we  
have built the platform to strengthen  
competitiveness through industrial  
partnerships and divestitures. Addi•  
tional details are contained in this  
report.  
sponsibility to our employees and to  
the worldwide community. Your com•  
pany is strong because of its resolute•  
ness in pursuing its strategic goals  
while at the same being able to take  
quick and effective action wherever  
necessary.  
More changes will take place in  
the future. We have taken the initial  
offensive not with isolated measures,  
but with a coherent, overall plan  
which we are putting into effect reso•  
lutely, step by step. Some important  
successes have already been achieved,  
others will follow. This is a primary  
reason why we have decided to  
broaden your company's equity base  
which will give us the financial  
security for our further growth.  
Letter to the Stockholders and Friends of our Company  
5
The Board of Management of Daimler-Benz AG  
DR. JUR.  
HANS-WOLFGANG  
HIRSCHBRUNN  
Stuttgart  
Personnel  
EDZARD REUTER  
Stuttgart  
Chairman  
PROF. DR.-ING.  
HARTMUT WEULE  
Stuttgart  
Research and  
Technology  
DR. RER. POL.  
GERHARD LIENER  
Stuttgart  
Finance and Materials  
EDZARD REUTER  
DR. RER. POL. GERHARD LIENER  
born 1932 in Stuttgart,  
Member of the Board of Management  
since 1982,  
Retired from the  
Board of Management:  
born 1928 in Berlin,  
Member of the Board of Management  
since 1973,  
(on May 26, 1993)  
PROF. DR.-ING. E.H. DR. H.C.  
Werner Niefer  
Stuttgart,  
until 1979 responsible for Corporate  
Planning and Organization,  
from 1980 to 1987 responsible  
for Finance,  
until 1987 responsible for Subsidiaries  
and Affiliated Companies,  
since 1987 responsible for Finance  
and Materials,  
Deputy Chairman  
President and Chief Executive  
Officer of Mercedes-Benz AG,  
since 1987 Chairman,  
under contract until 1995.  
under contract until 1997.  
(Deceased September 12, 1993).  
JÜRGEN E. SCHREMPP  
DR. JUR. MANFRED GENTZ  
born 1942 in Riga,  
born 1944 in Freiburg,  
Member of the Board  
Member of the Board of Management  
since 1983,  
until 1990 responsible for Personnel,  
since 1990 responsible for the  
corporate unit Daimler-Benz  
InterServices (debis),  
of Management since 1987,  
until 1988 responsible for the  
Commercial Vehicle Division,  
since 1989 responsible for the  
corporate unit Deutsche  
Aerospace (DASA),  
under contract until 1995.  
under contract until 1999.  
DR. JUR. HANS-WOLFGANG  
HIRSCHBRUNN  
ERNST G. STOCKL  
born 1944 in Sulzburg,  
Member of the Board of Management  
since 1991,  
responsible for the corporate unit  
AEG Daimler-Benz Industrie,  
under contract until 1996.  
born 1933in Offenburg,  
Member of the Board of Management  
since 1990,  
responsible for Personnel,  
under contract until 1996.  
HELMUT WERNER  
born 1936 in Köln,  
Member of the Board of Management  
since 1987,  
until 1992 responsible for the  
Commercial Vehicle Division,  
since 1992 responsible for the  
corporate unit Mercedes-Benz,  
under contract until 1997.  
PROF. DR.-ING. HARTMUT WEULE  
born 1940 in Bitterfeld,  
Member of the Board of Management  
since 1990,  
responsible for Research  
and Technology,  
under contract until 1996.  
Board of Management  
7
Report of the Board of Management  
Business Review  
Consolidated 1993 revenues of Daimler-Benz declined by 4% on a  
comparable basis to DM 97.7 billion. The decrease in business was  
caused by adverse world economic conditions. In all areas of the  
group, action has been taken to reduce costs and improve produc•  
tion processes on a long-term basis. We shall continue to take this  
action to ensure that the group remains profitable.  
problems hindering production in Ger•  
many caused companies to reduce in•  
vestments. This also hurt economic re•  
construction in the new Federal states,  
where both the speed and the quality  
of economic growth lagged far behind  
the high expectations.  
Disappointing Economic Trends  
Economic conditions were unfa•  
vorable to the Daimler-Benz group in  
Daimler-Benz:  
Revenues of DM 98 Billion  
The trend in business of the  
virtually all parts of the world in 1993. Daimler-Benz group reflects the diffi•  
Although modest improvements in the cult economic climate. Consolidated  
USA and the United Kingdom contin•  
ued, hopes of an upturn in the other  
1993 revenues totaled only DM 97.7  
billion, which was 4% below 1992  
Western European industrial countries when comparably calculated. Reve•  
and Japan were not met. Even the  
strong growth in various newly indus•  
trializing countries of Asia and Latin  
America failed to stimulate the global  
economy to any significant extent.  
In Germany, the economic trend  
was particularly disappointing. The  
recession which began in the second  
half of 1992, became worse during  
nues in the European Union were also  
reduced by 11 % to DM 58.4 billion,  
while those in Germany also declined  
by 11% to DM 38.3 billion. However,  
in the US market business volume in•  
creased by 11 % to DM 16 billion and  
in other markets by 7% to DM 23.4  
billion.  
Consolidated shared revenues of  
the business units of Mercedes-Benz,  
1993, sparked by the low level of do•  
mestic demand and the decline in Ger• AEG, DASA and debis were 63%, 11 %,  
man exports due to adverse conditions 19% and 7% respectively.  
in major markets. Also, the strength•  
ening of the Deutschmark, against  
most other European currencies, made Successful Start for New C-Class  
German export products more expen• As a result of the recession pas•  
Mercedes-Benz Cars:  
sive. The reduced spending by German senger car sales declined in nearly all  
consumers is attributable to the grow• Western European markets including  
ing burden of taxes and levies, cou•  
Japan. The positive market trend in  
pled with rising unemployment. At the North America and various newly in•  
same time, idle capacity and structural dustrializing countries overseas was  
not able to compensate for the reces•  
sion, and accordingly worldwide de•  
mand for cars was reduced by 4%.  
Note:  
The Business Review is the combined audited  
Business Review of Daimler-Benz AG and the  
Daimler-Benz group.  
8
Business Review  
Even under these conditions,  
passenger car sales of the Mercedes-  
Benz corporate unit remained stable.  
Mercedes-Benz worldwide sales of  
cars in 1993 declined by just 2% to  
New Corporate Structure for AEG  
On December 8, 1993, the corpo•  
rate unit AEG completed its new cor•  
porate structure which will contribute  
track-bound products and systems to  
wide-range, cost-cutting and perfor•  
mance improvement program to create  
a more efficient structure. The meas•  
ures include a reduction in personnel  
through 1996 and also include plant  
508,100 units. The newly launched  
the core transportation business of the closures.  
C-class and the updated E-class, im•  
proved Mercedes-Benz' market condi•  
tions, although, as a result of the first  
Daimler-Benz group. It will also include  
Effective January 1, 1993, the Fok-  
a microelectronics function, serving all ker group, in which a majority owner•  
sectors of the group, along with the  
half of the year, annual registrations in traditional automation and power  
ship was purchased on May 19, 1993,  
was merged into the Aircraft division.  
Incoming orders at Deutsche Aero•  
space, amounting to DM 15.6 billion,  
were 8% below those of 1992.  
Germany declined by 12% to 209,900  
vehicles. Foreign sales, totalling  
transmission and distribution  
business. The new structure will dis•  
solve activities which do not have a  
strategic role within the group.  
2
87,400 units, remained stable.  
In response to the generally unfa•  
vorable 1993 market situation and in  
order to reduce inventory, Mercedes-  
Benz reduced passenger car produc•  
tion by 9% to 480,600 vehicles.  
Due to the acquisition of Kiepe  
debis Continues  
Elektrik a significant increase in cus•  
tomer purchase orders was recorded  
in the Rail Systems division.  
to Increase Revenues  
The debis corporate unit increased  
its total output in 1993 by 20% to  
DM 9.5 billion. The primary markets  
were Germany and the USA.  
There was a sharp increase in  
business with customers outside the  
Daimler-Benz group, which increased  
The same development of cus•  
Mercedes-Benz  
tomer purchase orders applied to the  
Microelectronics field of activity and to  
Postal Automation, while in Industrial  
Commercial Vehicles:  
Market Position Maintained  
Mercedes-Benz sold 253,900 com• Automation and Electrotechnical Sys•  
mercial vehicles worldwide which was tems and Components orders fell short from 79% to 83% as a proportion of  
a reduction of 8% from 1992. The de•  
cline is attributable to the recession in chase orders rose slightly by 2% to  
Western Europe. Commercial vehicle  
registrations in Germany declined by  
of 1992 levels. Overall, customer pur•  
total revenue. Although further acquisi•  
tions were made during 1993, the in•  
crease in output of debis was attributa•  
ble to growth in existing areas of the  
company. The Financial Services divi•  
sion experienced a substantial expan•  
sion in business, resulting from an  
increase in international markets and  
an expansion of the range of services  
provided.  
DM 12.1 billion.  
25% to 82,200 units. Significant de•  
Further Reduction in Capacity  
at Deutsche Aerospace  
creases were also recorded in other  
Western European markets. However,  
Mercedes-Benz continues to maintain  
its position as the leading manufac•  
The economic environment of the  
Deutsche Aerospace corporate unit  
continued to decline. Business in the  
turer of trucks over 6 tons, with a mar• Aircraft division as well as the De•  
ket share in Western Europe of more  
than 30%.  
fense and Civil Systems division dete•  
riorated significantly due to the struc•  
tural crisis affecting the airlines and  
the drastic cuts in spending by the  
Federal Armed Forces. Incoming or•  
Difficult Employment Situation  
At year-end, the Daimler-Benz  
Significant growth was experi•  
enced at Freightliner and most of the  
other overseas subsidiaries, however,  
group employed 366,736 people (com•  
parably calculated including Fokker;  
employees in 1992: 388,888). By Janu-  
ary 1, 1994 the group workforce was  
even with this growth in foreign sales, ders are insufficient to allow for full  
total commercial vehicle production  
was reduced by 13% to 241,600  
units.  
utilization of capacity. Accordingly,  
Deutsche Aerospace has initiated a  
Business Review  
9
reduced further to total 362,190. From  
the end of 1993, 284,576 people  
During 1993, numerous cost re•  
duction projects were initiated by the  
Company which resulted in substan•  
tial efficiency gains at both the manu•  
facturing plants as well as our  
suppliers.  
In the Commercial Vehicle division,  
European investment focused on the  
introduction of environment-friendly  
engines and the light truck model up•  
date. Over DM 1 billion was expended  
worldwide to maintain the compet•  
itiveness of the Mercedes-Benz com•  
(1992: 302,464) were employed in  
Germany. Mercedes-Benz employed a  
total of 209,933 people at the end  
1
993, AEG employed 58,921, DASA  
employed 86,086, and debis employed  
Global sourcing activities in•  
8
2
,812. Daimler-Benz AG employed  
creased during 1993. The "Purchasing mercial vehicle range and to take ac•  
,984, including 540 in group manage• Drive in the New Federal States" initi• count of market-specific requirements.  
ment functions, 1,274 in group re•  
search functions and 1,170 in service  
areas for the corporate units and the  
Mohringen location.  
ated by West German companies dur•  
Investment in property, plant and  
ing 1992 had excellent results. Impor• equipment additions totalled DM 0.6  
tant contributions were made by the  
companies of the Daimler-Benz group,  
who increased their purchases in the  
new Federal States to more than DM  
800 million (1992: DM 600 million).  
billion for AEG , DM 1.0 billion for  
DASA, DM 0.2 billion for debis, and  
DM 0.1 billion for the holding com•  
pany.  
Additions to leased equipment to•  
talled DM 5.9 billion (1992: DM 5.2  
billion). Borrowing for leasing and  
sales financing activities totalled  
DM 13.7 billion (1992: DM 11.0  
billion).  
In the corporate units of the  
group, the employment situation was  
occasionally strained. The unsatisfac•  
tory market situation required reduc•  
tion in the size of the workforce, with  
Investment in Property, Plant  
a view to safeguarding the competitive and Equipment at DM 5.4 Billion  
strength of Daimler-Benz. Reductions  
in personnel were necessary at the  
AEG and DASA corporate units in  
Substantial funds continued to be  
deployed in 1993 to safeguard the fu•  
ture of Daimler-Benz. Investment in  
1
993, along with reduced work shifts  
property, plant and equipment totalled Research and Development Projects  
in response to inconsistent production DM 5.4 billion. During 1992, invest•  
amount DM 9 Billion  
capacities.  
ments totalled DM 8 billion. Also in  
A total of DM 9 billion (1992: DM  
9.6 billion) was expended on research  
and development of which develop•  
ment work for third parties, primarily  
at the Deutsche Aerospace corporate  
unit, accounted for DM 4.1 billion.  
On October 19, 1993, the Daimler-  
Benz Ulm Research Center was com•  
pleted at a cost of DM 270 million,  
1993 additions to intangible assets  
Purchasing Volume  
totalled DM 0.2 billion, and deprecia•  
tion and disposal of property, plant  
and equipment and intangible assets  
totalled DM 6.3 billion.  
at approximately DM 57 Billion  
Despite reduced production in  
Germany and lower investments than  
in the previous year, the volume of  
purchases due to the first time inclu•  
sion of Fokker, increased from 1992.  
Worldwide purchases of goods and  
services totalled DM 56.7 billion  
The investment in property, plant  
and equipment was for new produc•  
tion technologies, new products and  
new strategies. The largest share of to• which can accommodate 1,000 em•  
tal investment, DM 2.6 billion (1992:  
DM 4.2 billion), was deployed by  
Mercedes-Benz. In the Passenger Car  
division, the preparations for produc•  
ployees. At the center various re•  
search projects for the corporate units  
and development on key technologies  
is performed. The spectrum of activ•  
(
1992: DM 55.7 billion). Of these pur•  
chases, Mercedes-Benz accounted for  
6%, 10% by AEG, 18% by Deutsche  
6
Aerospace and 6% by Daimler-Benz  
InterServices.  
tion of the new C-class and E-class, the ities includes but is not limited to mi•  
introduction of 4-valve gasoline and  
diesel engines and the change-over to  
water-based paints consumed DM 1.3  
billion of the total investment.  
croelectronics, functional and struc•  
tural materials, production research  
and the environment, energy research  
and information technology.  
The Mercedes-Benz corporate unit  
expended DM 3.2 billion (1992: DM  
3.1 billion) on passenger car and com•  
mercial vehicle development.  
10  
Business Review  
In the Passenger Car division, the  
At Deutsche Aerospace, DM 4.8  
billion (1992: DM 5.5 billion) was  
spent on research and development; of  
which projects carried out for third  
parties accounted for DM 3.9 billion.  
In the Aircraft division, development  
work in the Airbus and Fokker pro•  
grams continued. Further areas of ac•  
1
90 compact series was replaced in  
June 1993 by the new C-class. The  
C-class has been newly engineered  
throughout and offers significantly  
more leg room. In June 1993, the  
E-class was given a new look, incor•  
porating styling features from the  
S-class and C-class. With a new genera• tivity included the EF 2000 European  
tion of four-valve gasoline and diesel  
Fighter Aircraft and the Tiger helicop•  
engines, we are giving our C-class and ter development program. In Space  
E-class customers noticeably more  
power and comfort, coupled with low  
Systems, research and development  
focused on the Cluster, ERS-2, Polar  
fuel consumption. At the Frankfurt In• Platform and Ariane programs. In the  
ternational Motor Show, we presented  
our VISION A 93 study, with which we  
intend to enter a new market segment  
with high growth potential. VISION A  
is the foundation for development  
work on the new Mercedes-Benz  
A-class.  
Defense and Civil Systems division,  
further development was carried out  
on anti-aircraft systems and the Milan  
and Hot anti-tank systems. In the non-  
military sector, digital transmitting  
technology was the focus in the Eu•  
reka program. In Propulsion Systems,  
a considerable investment was ex•  
pended on improving the efficiency  
and service life of the PW 2000 jet en•  
gine range. In the field of medical sys•  
tems, a completely new lithotripter  
system was introduced to the market.  
The Mercedes-Benz Commercial  
Vehicle division presented new,  
environment-friendly engines in 1993  
which are being successively phased  
into production. A variety of product  
improvements have made the vehicle  
range more attractive and even more  
closely tailored to customer require•  
ments.  
Consolidated Net Income  
Falls to DM 0.6 billion  
In 1993, AEG spent DM 764 mil•  
lion (1992: DM 726 million) on re•  
The net income of the Daimler-  
Benz group in 1993 totalled DM 0.6  
search and development. Central areas billion (1992: DM 1.45 billion). The de•  
of research activity included systems  
engineering, postal automation sys•  
tems, a new generation of rail cars,  
local public transport concepts and  
products, semiconductors and vehicle  
electronics.  
cline of DM 0.8 billion was due to sig•  
nificant declines in operating results  
in all the corporate units; however,  
there were also some promising devel•  
opments. Adapting certain valuation  
and accounting methods to tax regula•  
tions and US accounting standards led  
to an extraordinary income of DM 2.6  
billion.  
Extraordinary results of DM 7.4  
budgets, and the recording of provi•  
Allocation of Earnings  
billion (1992: DM 4.5 billion) included, sions for structural adjustments of  
Net income of Daimler-Benz AG  
totalled DM 390 million (1992: DM  
703 million excluding extraordinary  
income). This amount contains extra•  
ordinary income of DM 1,722 million  
(1992: DM 4,490 million) which re•  
among others, a book profit of DM 1.7  
billion from the sale of securities. Re•  
DM 1.1 billion. Further adverse influ•  
ences were the reduction in deliveries  
sults from ordinary business activities to international airlines and the  
were a loss of DM 3.3 billion (1992:  
DM 2.0 billion) is the fundamental  
basis for the profit/loss contributions  
of the operating units. Included in the  
results from ordinary business activ•  
ities are costs arising from structural  
first-time inclusion of Fokker, where  
negative results were posted.  
debis made a positive contribution sulted from adjustments to valuations  
to the Daimler-Benz consolidated re•  
sult of DM 0.4 billion (1992: DM 0.3  
for tax regulations and U.S. accounting  
principles, particularly relating to pro•  
billion). Included in the positive contri• visions, inventories and receivables.  
measures amounting to DM 3.5 billion. bution was a negative contribution  
The automotive sector incurred a  
from Sogeti and additional restructur•  
loss of DM 1.3 billion (1992: a profit of ing expenditures in the Systemhaus  
The profit transfer agreement was  
slightly negative for Mercedes-Benz  
including extraordinary income, and  
debis, however, AEG and Daimler-  
Benz Luft- und Raumfahrt-Holding AG,  
DM 2.3 billion). This was mainly due  
to decline in revenues in the first half  
of 1993 and substantial restructuring  
expenditures of DM 1.7 billion. The  
foreign companies in the automotive  
sector made a larger overall contribu•  
tion than in the previous year.  
group.  
The net interest expense of the  
leasing and sales financing companies the parent company of the DASA  
totalled DM 0.3 billion (1992: DM 0.4  
billion). Consolidated net interest in•  
come, excluding the above expenses,  
amounted to DM 0.8 billion (1992: 1.0  
group, incurred considerable losses.  
At our Annual General Meeting on  
May 18, 1994, we shall propose that a  
dividend of DM 8 be paid per share of  
The contribution of AEG in 1993  
billion). The first-time inclusion of Fok• DM 50 par value (1992: DM 13). The  
fell sharply from the small positive re• ker and lower interest margins were  
total dividend payment will amount to  
DM 373 million.  
sult achieved in the previous year to a  
loss of DM 0.9 billion, as a conse•  
quence of economic factors and struc•  
tural expenditures of DM 0.6 billion.  
Particularly the fundamental restruc•  
turing in the Rail Systems field of ac•  
the primary reasons for the decline in  
net interest income.  
Outlook  
Sound Balance Sheet Structure  
Due to the continued increase in  
leasing and financing business, the  
The first signs of a recovery in the  
global economy are visible at the  
beginning of the 1994 financial year.  
Although the upward trend of the US  
economy is continuing, for Europe  
- with the exception of the United  
Kingdom - a slight recovery is the  
most that can be expected. The same  
also applies to Japan, although the gov•  
ernment is mounting large-scale eco•  
nomic programs to stimulate the econ•  
omy. In Germany, the recession has al•  
ready bottomed out, but a significant  
upturn in 1994 is unlikely. The first  
impetus should come from exports,  
not the least due to the devaluation of  
the Deutschmark against major cur•  
tivity, structural measures in Automat• balance sheet total increased by al•  
ion and in electric motors made large  
demands on resources.  
most 6% to DM 90.9 billion . On the  
asset side, both non-current and cur•  
rent assets increased. Liabilities rose  
due to the first-time inclusion of  
The negative result of Deutsche  
Aerospace increased further in 1993  
to DM 1.0 billion and was considerably Fokker and the higher financing re•  
worse than the 1992 loss of DM 0.5  
billion. The primary reasons for this  
negative result were due to declining  
quirements of the financial services  
business, while stockholders' equity  
was reduced due to the inclusion of  
revenues in Defense and in Space Sys• Fokker, having been valued according  
tems, due to reductions in government to Daimler-Benz accounting policies.  
Excluding the financial services busi•  
ness, which is primarily financed by  
debt, the equity ratio declined from  
2
8% to 26% and the proportion of non- rencies in the first months of the year,  
current assets in relation to stock•  
while domestic demand will be slow to  
holders' equity was reduced from 81% gain momentum.  
to 78%. Long and medium-term capital  
amounted to 60% of the consolidated  
balance sheet total.  
12  
Business Review  
Sales of Mercedes-Benz passenger  
cars in the first two months of 1994  
significantly exceeded the low level of  
Deutsche Aerospace expects to  
hold its revenues at the low level of  
1993 in the current financial year. A  
considerable increase is expected in  
the Space Systems division and a  
small increase in the Propulsion Sys•  
tems division. In the Aircraft division,  
positive results can be expected only  
from deliveries of the Dornier 328,  
which began at the end of 1993. In the  
Defense and Civil Systems division,  
increase of production in the Stinger  
1992. Commercial vehicle business in  
Europe was still unsatisfactory and in  
view of economic conditions will be  
very slow to rally. The growth of our  
markets in North America seems  
likely to continue. We do not expect  
vehicle demand to recover to any sig•  
nificant extent in Japan. Prospects in  
the newly industrializing countries in  
Asia and Latin America continue to be program to the target volume will  
promising.  
In order to maintain the compet•  
itiveness of our German-based opera•  
tions, the measures to increase pro•  
ductivity will be accelerated.  
offset declines in other projects.  
The comprehensive program to cut  
costs and improve performance  
launched by Deutsche Aerospace in  
1993 will continue through to 1996.  
Mercedes-Benz will also be expanding  
its global market presence and its  
worldwide activities in the areas of  
purchasing, manufacturing, research  
and development.  
Daimler-Benz InterServices ex•  
pects favorable development prospects  
in the services sector and anticipates  
an increase in its total output and the  
share of business with customers out•  
side the group. In those areas adver•  
sely affected by the recession, debis  
will take measures aimed at stabiliz•  
ing business. Cost-cutting and effi•  
ciency improvement programs will  
continue in 1994.  
AEG Daimler-Benz Industrie  
expects its Rail Systems, Micro•  
electronics and Automation fields of  
activity in particular to record in•  
creased sales. However, the intended  
sale of the Domestic Appliances field  
of activity and the power meters and  
lighting systems sectors will mean  
that overall, incoming orders and sales  
of AEG will be lower than in 1993. In  
addition, the restructuring of the AEG  
group will involve further industrial  
activities of the Daimler-Benz group  
being transferred to AEG Daimler-  
Benz Industrie.  
Our joint ventures will achieve  
cost savings by concentrating on their  
core areas of activity. Increased tech•  
nology transfer with other companies,  
new marketing strategies and develop•  
ment of solutions to transport prob•  
lems through traffic management sys•  
tems are focal activities of these joint  
ventures.  
Despite the prevailing adverse  
economic conditions, we believe the  
Daimler-Benz group will achieve an in•  
crease in business as well as signifi•  
cantly improve the earnings trend.  
Business Review 13  
Even our youngest ''customers" can rely on us because the engineers of Mercedes-Benz have  
always worked hard for safety. Always one step ahead, the Mercedes-Benz safety engineers  
invented the crash test and such trend-setting safety features as the crumple zone and the  
safety passenger cell. New Mercedes passenger cars continue to set new standards in the field  
of active and passive safety.  
Corporate Unit Mercedes-Benz  
The Western European automotive  
sector, faced with unfavorable sales  
trends at home, was forced to notice•  
ably cut production of both passenger  
cars and, to a greater extent, commer•  
cial vehicles.  
Competition on prices and terms  
in the commercial vehicle sector inten•  
sified further, and price pressure in•  
creased sharply even in the luxury  
segment of world passenger car mar•  
kets as a result of growing surplus ca•  
pacity.  
Consolidated sales of Mercedes-Benz for the 1993 financial year  
totalled DM 64.7 billion (- 3%). We took the opportunity in the diffi•  
cult business environment which characterized this year to make  
key decisions for the company. Bold measures were implemented  
to make our organizational structures and processes more efficient  
in order to safeguard the competitiveness of our German-based  
operations. We expanded the global presence of our company and  
laid the foundation for future growth by carrying out a strategic  
restructuring of our product policy.  
Sales Crisis in  
The entire European automotive  
sector was forced to implement far-  
reaching measures to bring about last•  
ing cost reductions. 1993 was marked  
by plummeting profits, reduced work•  
ing hours and workforce reductions  
throughout the industry.  
West European Automotive Sector  
The automotive sector was one of  
the areas hardest hit by the recession  
in Western Europe.  
Passenger car sales suffered in  
nearly all Western European markets  
as prevailing economic uncertainty de•  
pressed consumer spending. This was  
not offset by the more positive market  
trend in the USA and various newly  
industrializing countries. With a pro•  
nounced weakening in the Japanese  
market as well, the world wide de•  
mand for passenger cars diminished  
by 4% and thus to its lowest level  
since 1987.  
Mercedes-Benz:  
Sales of DM 65 Billion  
With sales revenue of DM 64.7 bil•  
lion (1992: DM 66.5 billion), Mercedes-  
Benz held its own in an extremely  
harsh business environment. While  
our volume of business in Western  
Europe fell by 12% to DM 38.3 billion  
as a result of the recession, we were  
able to boost sales revenue by 22% to  
Low investment confidence and  
growing surplus capacity in the truck• DM 10.0 billion in the United States,  
ing industry have slowed the replace•  
thanks in part to a strengthening of  
ment process in European commercial the dollar against the Deutschmark.  
vehicle fleets. Replacement volume  
had been especially dynamic in pre•  
vious years, due to European integra•  
tion and German unification. During  
Growth was also achieved in South  
America, Eastern Europe and, above  
all, in the newly industrializing  
nations of Asia. In Japan, conversely,  
we could not avoid a drop in sales  
revenue of 10% to DM 2.5 billion.  
1
993, purchases were postponed due  
to the unfavorable overall economic  
outlook causing a sharp drop in sales  
In the Passenger Car division, rev•  
in major European commercial vehicle enues totalled DM 38.4 billion, down  
markets. In contrast, the upturn in the 3% from the previous year. Revenues  
USA grew stronger, especially the  
heavy duty trucks. Strong market  
growth was also achieved in various  
newly industrializing countries in  
South America and Asia.  
of the Commercial Vehicles division  
were reduced by 2% to DM 26.2  
billion.  
1
6
Mercedes-Benz  
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The Mercedes-Benz range extends from sleek SL convertibles for the sporty individualist to  
E-class station wagons catering to the family. For all their diversity, the different models have  
in common the typical Mercedes-Benz qualities which are prized by our customers the world  
over. Children, in particular, appreciate the advantages of the practical and versatile E-class  
station wagon.  
Mercedes-Benz Passenger Cars:  
Market Position Strengthened  
by C and E-Classes  
Following the excellent years of  
1991 and 1992, our new registrations  
in Germany fell by 25% to 82,200  
commercial vehicles.  
The unit sales corresponding to  
the consolidated revenues fell during  
Double-digit declines were also  
1
993 to 508,100 (1992: 520,200) pas•  
senger cars.  
With the introduction of the new  
posted in other Western European  
countries, with the result that unit  
sales in Western Europe outside Ger•  
many lagged 14% behind the previous  
year's level. Despite greatly intensifed  
competition, we were able to maintain  
our position as the leading manufac•  
C-class and the updated E-class in  
mid-1993, we were able to increase  
our market position substantially in  
Germany. S-class sales were affected  
by the recession in Germany, although turer of trucks over 6 tons, with a 30%  
less than the rest of the market, the  
S-class therefore improving the mar•  
ket share within its segment. Due to  
the weak first half of the year, new  
registrations of Mercedes-Benz cars, at  
market share in Western Europe.  
We achieved strong results in  
overseas markets. Our subsidiary,  
Freightliner, made a major contribu•  
tion to that success. With sales of  
2
09,900, failed to reach the previous  
36,800 (1992: 27,400) Class 8 trucks  
year's volume of 239,000 vehicles.  
(upwards of 15 tons), Freightliner was  
We sold 289,300 passenger cars  
abroad and were able to maintain  
the strong volume of 287,400 unit  
sales, we achieved the previous year.  
While unit sales fell in Western Eu•  
rope and Japan as a consequence of  
the recession, growth was seen in the  
Asian newly industrializing countries,  
Eastern Europe and Latin America.  
able to improve the position of market  
leader which it attained the year be•  
fore, with a share of almost 24% in  
this fiercely contested market.  
A total of 241,600 (1992: 277,300)  
commercial vehicles rolled off the as•  
sembly lines at the 46 production sites  
of the Mercedes-Benz group. Produc•  
tion volume in Germany had to be cut  
Since the new C-class could not be de• by 26% to 121,200 vehicles due to the  
livered to American customers until  
market situation in Western Europe.  
year's end, sales in the US market also Our foreign plants set a new produc•  
fell to 61,900 (1992: 63,300) pas•  
senger cars.  
tion record, of 120,400 vehicles, with  
an increase of 7%.  
In response to the generally  
unfavorable demand situation in the  
Increased Competitiveness  
1993 financial year and in order to  
Through New Structures  
reduce inventories, Mercedes-Benz  
cut passenger car production by  
Faced with the difficult market sit•  
uation worldwide, we had to intensify  
our efforts to improve competitiveness  
in all areas of the company.  
9% to 480,600 vehicles.  
Mercedes-Benz Commercial  
Vehicles: Market Position  
Maintained  
We have set up new performance  
centers throughout Mercedes-Benz AG  
which will help to achieve this goal.  
We have strengthened our internal  
Our commercial vehicles also suf•  
fered from the difficult business condi• management structures and organiza•  
tions in Western Europe. Worldwide  
tion through extensive delegation of  
we sold 253,900 vehicles during 1993. decision-making and responsibility.  
This amounts to 21,200 fewer units  
than in the previous year, a drop of 8%.  
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As part of the vigorous restructuring  
which we implemented during 1993,  
the number of hierarchical levels and  
the number of positions at each level  
were sharply reduced. Accordingly  
processes and decision-making chains  
are both faster and more flexible.  
We will increase the capacity utili•  
zation efficiency at our plants, thereby  
improving the productivity of the capi•  
tal deployed, by new methods of de•  
coupling working times from oper•  
ating times. With the introduction of  
teamwork and the optimization of  
work processes, productivity and the  
quality of labor have increased.  
Reductions in the Workforce  
The weakness in important mar•  
kets and growing pressure to reduce  
costs necessitated reductions in the  
workforce at Mercedes-Benz, as was  
the case throughout the industry.  
At year's end, the group had  
2
09,933 (1992: 222,482) employees  
including 9,992 (1992: 10,752)  
trainees and apprentices. At  
Mercedes-Benz AG, the workforce fell  
by 9,982 to 159,098 employees. Re•  
ductions affected the factories as well  
as the administrative headquarters  
and sales organization.  
Further reductions in the work•  
force to protect the international com•  
petitiveness of our German-based op•  
erations are unavoidable. Given the  
continued high level of surplus capac•  
ity in Western Europe, the Commercial  
Vehicle division will be most affected  
by future cutbacks.  
2
0
Mercedes-Benz  
Customer satisfaction with Freightliner trucks is the foundation of our success in the newly  
emerging NAFTA region. Our Freightliner subsidiary widened its lead in the US market for  
Class 8 trucks (upwards of 15 tons) with an increase in its market share to 24%.  
During 1993 sales of Freightliner increased by approximately 40% to 45,800 trucks.  
(see following pages)  
Signal for the Future  
DM 2.6 Billion Invested  
In order to maximize the sales  
potential for our passenger cars and  
commercial vehicles in Eastern Eu•  
rope, the Commonwealth of Indepen•  
dent States, China, South East Asia  
and South America, we have increased  
our efforts to set up sales and service  
organizations in those countries.  
At the end of 1993, the Board of  
Management and the labor council  
concluded an internal agreement re•  
in Property, Plant and Equipment  
To protect our competitiveness in  
the automotive field well into the  
garding improved competitiveness and future, we pursued vigorously our  
workforce reductions at Mercedes-  
Benz AG. This agreement opened the  
way both for economically viable pro•  
duction of the new A-class at the  
planned investment projects despite  
the strained profit situation of the  
company.  
In the Passenger Car division the  
Rastatt plant and for a socially accept• focus of our investment budget of DM  
New Passenger Car Plant  
able implementation of further neces•  
sary reductions in personnel. This  
means that measures already initiated the gasoline and diesel engines with  
1.3 billion was on preparations for pro• in the USA  
duction of the new C and E-classes,  
In September, 1993, the decision  
was made to build a new Mercedes-  
to boost productivity can be continued  
in 1994.  
This agreement will strengthen  
our production operations in Germany  
and the long-term profitability of the  
company.  
4-valve technology and the conversion Benz plant in Tuscaloosa, Alabama, in  
to water-based paints.  
the southern United States. The plant  
will manufacture a sports utility vehi•  
cle with 4-wheel drive. This will give  
us a foothold in a new market segment  
with exceptional growth prospects.  
This vehicle will represent a new se•  
ries in the Mercedes-Benz range. The  
favorable sales prospects in the United  
States, as well as the intensity of the  
competition in this segment led us to  
choose this location.  
In the Commercial Vehicle divi•  
sion, our European investments were  
concentrated on converting our model  
range to environmentally compatible  
engines and the updating of the light  
duty trucks. Worldwide we spent over  
DM 1 billion to enhance our model  
range with even greater precision to  
the complex demands of the different  
TANDEM - A New Concept  
for Relations with Suppliers  
We focused on relations with the  
supply industry using an innovative,  
comprehensive plan developed during markets.  
993. This new plan is called TANDEM  
1
to reflect the joint goal of increasing  
the competitiveness of all parties.  
Within the framework of TANDEM we  
involve our partners more deeply than  
ever before in our company's internal  
processes. The experience and ideas of  
our suppliers are utilized even more  
intensively than in the past, for mu•  
tual gain.  
Expansion of Our  
Production of the A-class  
Worldwide Sales Network  
We further strengthened our sales  
organization with investments of DM  
in Rastatt  
After long and difficult negotia•  
tions with the labor council, the Board  
of Management decided to produce the  
new A-class in Rastatt beginning in  
1997.  
The decision in favor of the loca•  
tion in Germany was made possible by  
the volume of cost reductions agreed  
upon by the labor council and manage•  
ment.  
The A-class concept offers com•  
pact outer dimensions with extremely  
generous and variable use of interior  
space, as well as a level of safety un•  
matched in its class. With this vehicle,  
Mercedes-Benz has redefined the seg•  
ment of sub-compact cars.  
224 million (1992: DM 219 million).  
Approximately half of these funds  
were used to expand and modernize  
our sales and service organization in  
Germany, with special emphasis on  
the new Federal states.  
Purchasing volume at DM 39 bil•  
lion, was 4% below the previous year's  
level. As a result of our increased ac•  
tivities in new purchasing markets,  
more purchases were made from out•  
side Germany. Since some TANDEM  
projects led to significant cost savings  
in the year under review, price trends  
were slightly down.  
Mercedes-Benz 21  
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R&D Expenditure  
DM 3.2 Billion  
We will actively expand the global  
market presence of our company, as  
In order to react even faster to the well as the worldwide activities of  
evolving demands of our customers  
Mercedes-Benz in the areas of pur•  
worldwide, we have implemented new chasing, manufacturing, research and  
forms of interdisciplinary project man• development.  
agement in our research and develop•  
ment departments. The supply indus•  
try, through the TANDEM plan, was  
also integrated in this process at a  
very early stage.  
The year's outstanding model in•  
novation was the new C-class, which  
was presented to the public in June,  
All our efforts in the Passenger  
Car division are directed at strength•  
ening our position as manufacturers of  
exclusive vehicles by expanding our  
range to include products for new,  
growing market segments.  
Our foremost goal in the Commer•  
cial Vehicle division is to offer individ•  
ualized solutions to the transportation  
needs of our extremely diverse world•  
wide customer base.  
1993, in four different model versions.  
We also refined the E-class consid•  
erably, with a model update in June.  
The Mercedes-Benz commercial vehi•  
cle range was also upgraded during  
1
993 with new, environmentally com• Corporate Unit AEG Daimler-Benz Industrie  
Adverse economic conditions had a substantial impact on business  
at AEG. Although incoming orders rose due to an increase in for•  
eign business, sales revenue fell below the previous year's level.  
We intend to align future business policy at AEG more closely to  
the strategic position of the Daimler-Benz group and we have  
already launched wide-ranging structural programs. The goal of  
these measures is to close loss-making activities and to strengthen  
the strategic basis and earnings capability of the future fields  
of activity.  
patible engines and various product  
improvements.  
Outlook  
There is no significant improve•  
ment in sight in the business condi•  
tions for our company in 1994.  
Although we expect continued  
growth in our United States markets,  
the economic weakness in Europe will  
improve at best, only gradually. Nor  
can any significant recovery in Japa•  
nese automotive demand be expected,  
although the newly industrializing na•  
tions in Asia and Latin America show  
good prospects.  
Further Decline in Business  
in the West German  
Electrical Engineering Industry  
1993 saw a fall of almost 7% in  
In order to keep our German based  
operations competitive, we must in•  
crease the measures already imple•  
mented to boost productivity.  
the output of the West German electri•  
cal engineering industry. The decline  
was caused by the adverse conditions  
for foreign business, the fall in de•  
mand in Germany and the economic  
problems facing customers in impor•  
tant areas such as mechanical engi•  
neering, road vehicle building and the  
chemical industry. Sales and incoming  
orders fell sharply from their levels of  
the previous year, by 5% and 6%,  
respectively. The fall in business was  
particularly marked in Germany, while  
2
4
AEG Daimler-Benz Industrie  
AEG is playing its part in ensuring that Shanghai's school children are punctual. Constructed  
by the "German Shanghai Metro Group" consortium headed by AEG, the metro system will be  
extended in stages in the coming years. In May, 1993 operation commenced on the first seven-  
kilometer section of track. The metro project is a major milestone in the development of an  
efficient infrastructure for this fast-growing Southern Chinese metropolis. (see following pages)  
foreign business declined by almost  
%. Further falls in capacity utilization  
made it necessary to cut back produc•  
tion and drastically reduce workforce  
levels by almost 8%.  
Sales Down on the Previous Year  
Sales revenue of the AEG group at  
DM 11.0 billion were 3% less than the  
comparable figure for the previous  
year. In Germany revenues fell by 3%  
to DM 6.5 billion; revenues in  
Restructuring the Group  
1
The business goals of AEG will in  
future be aligned more closely to the  
strategic positioning of the Daimler-  
Benz group. AEG will in the future  
comprise only those business  
activities  
High Level of Incoming  
foreign markets also fell by 3%, to  
DM 4.5 billion.  
Orders from Foreign Markets  
Incoming orders in the AEG group  
totalled DM 12.1 billion, 2% over the  
comparable figure for the previous  
year. The increase was generated  
solely by the foreign markets,  
where demand increased by 16% to  
DM 5.3 billion. Orders from Germany  
were down by 7%.  
•
which contribute track-bound  
products and systems to the core  
transport business of the Daimler-  
Benz technology group,  
The growth in sales in Rail  
Systems resulted largely from the in•  
voicing of projects in Germany and  
from the first-time consolidation of  
Kiepe Elektrik GmbH.  
The increase in sales in the Micro•  
electronics field of activity was based  
on the good performance by TEMIC  
TELEFUNKEN microelectronics in the  
area of semiconductors and vehicle  
which offer strategically important  
microelectronics technology to the  
group and the external market,  
which are responsible for indus•  
trial tasks within the group which  
do not strictly belong to the auto•  
motive or aerospace sectors, along  
with those which have evolved  
from AEG's traditional business  
focus.  
<
The largest increase in orders of  
25% was recorded in the Rail Sys•  
tems field of activity. This was attribu• equipment.  
table especially to large orders from  
abroad, for example for a city rail sys•  
tem for Kuala Lumpur, Malaysia, a  
In Automation, revenues fell  
slightly short of the previous year's  
level, since the recession led to a fall  
monorail system for Newark Airport in in business particularly in the indus•  
The restructuring of the group will  
the USA, and a mass transit system  
for the City of Toronto in Canada.  
trial systems division.  
also involve divesting activities which  
lie outside the strategic core busi•  
The Electrotechnical Systems and  
A positive trend was also recorded Components field of activity presented nesses of AEG and the Daimler-Benz  
in the Microelectronics field of activ•  
ity, largely due to a marked increase  
in orders at TEMIC TELEFUNKEN  
microelectronics.  
The Automation field of activity  
experienced a substantial loss of mo•  
mentum, particularly in the area of in•  
dustrial automation, due to weak do•  
mestic demand. However, postal auto•  
mation showed a positive trend due to  
a high level of incoming orders from  
foreign markets.  
Orders in the Electrotechnical Sys•  
tems and Components field of activity  
failed to match the levels of the pre•  
vious year. The components division  
was particularly hurt by the recession.  
a divided picture. While the Energy  
group, such as domestic appliances,  
Systems Technology division achieved lighting systems and power meters.  
a slight growth in sales, business in  
the Components division was below  
the previous year's level due to the  
strong impact of the recession.  
The joint venture formed with  
Electrolux in 1992 involving a joint  
production structure - initially for wet  
appliances - fulfilled the expectations  
of both partners. However, 1993 saw  
changes in the operating environment  
of AEG Hausgerate: the continuing  
concentration in the retail trade  
throughout Europe, the joining to•  
gether of competitors as well as the  
appreciation of the DM relative to  
other currencies.  
In Domestic Appliances, falling  
foreign business resulted in a slight  
decline in sales from the 1992 level.  
AEG Daimler-Benz Industrie 25  
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It was decided at the end of 1993  
Investment in  
that AEG would withdraw from domes• Modernization Programs  
tic appliances. A preferential offer was  
Investment by the AEG companies  
given to Electrolux to acquire all opera• in 1993, including the assets taken  
tions in this field of activity.  
over from newly acquired companies,  
totalled DM 764 million (1992: DM 916  
million).  
Structural Program  
for AEG Rail Systems  
Investment activity concentrated  
The reorganization of the Rail Sys• on modernization at AEG Schienen-  
tems field of activity is a central ele•  
ment in the overall AEG structural  
program. Acquisitions made over re•  
cent years have caused revenues to  
increase. It is now necessary to com•  
plete the integration of these activ•  
ities. Postponement of orders by the  
German Federal Railways, surplus ca•  
pacity in the German rail industry  
particularly in the mechanical sector,  
fahrzeuge in Hennigsdorf, projects in  
the Domestic Appliances field of activ•  
ity and projects at TEMIC in Nurem•  
berg. Outside Germany, AEG invested  
principally in the Pittsburgh Technogy  
Centre for Systems Electronics, in the  
USA, the administration and service  
premises in Greece and the TEMIC  
plants in South East Asia and Mexico.  
and increased access of Western Euro• Systems-Oriented  
pean competitors to projects for the  
German core market have significantly  
depressed the profitability of  
revenues.  
Research and Development  
At DM 764 million (1992: DM 726  
million), research and development  
expenditure increased from the pre•  
vious year and as a proportion of sales  
revenue increased to 7%.  
Rationalization and cost-cutting  
programs have been started with a  
goal to strengthen competitiveness.  
Principal areas of research and  
Any remaining overlap between activ• development activity included systems  
ities at different sites will be elimi•  
nated and co-ordinating functions will  
be centralized at the Hennigsdorf site.  
engineering, postal automation sys•  
tems, a new generation of rail cars,  
local public transport concepts and  
The level of vertical integration will be products, semiconductors and vehicle  
reduced in all areas. Highly labor-  
intensive activities will be transferred  
to low-cost locations. This will lead to  
the closure of AEG's Berlin Nonnen-  
damm site. All programs are sched•  
uled to be completed by the end of  
electronics.  
More than 58,900 Employees  
Worldwide, AEG employed 58,921  
people at the end of 1993, 44,591 of  
these in Germany. The reduction of ap•  
proximately 3% in the total workforce  
from the prior year is largely attributa•  
ble to capacity adjustments which  
were necessitated by the strained  
employment situation.  
1995.  
2
8
AEG Daimler-Benz Industrie  
Outlook  
improvement in the German electrical  
AEG expects to see a slight expan• engineering industry, as stabilization  
sion in its business volume in 1994,  
with a slightly stronger increase in  
foreign markets than in Germany.  
Increased revenue is expected partic•  
ularly in the Rail Systems, Micro•  
electronics and Automation fields of  
activity. However, the intended dives•  
titures from the Domestic Appliances  
field of activity and the power meters  
and lighting systems sectors will  
reduce consolidated revenues. The  
restructuring of the AEG group will  
involve additional industrial activities  
of the Daimler-Benz group being trans•  
ferred to AEG. It is planned that AEG  
will take over the industrial manage•  
ment. It is also intended to integrate  
the diesel engine and decentralized  
power supply activities of MTU  
means a continuation of extremely  
depressed revenues as well as the  
underutilization of capacities.  
This is also the case for AEG. Fur•  
thermore, we have to continue our  
comprehensive restructuring program  
in 1994, which forms a necessary part  
of our new strategic direction. These  
restructuring programs will have a one  
time charge which will result in last•  
ing cost reductions in future years.  
All of our measures to secure the  
future should turn around earnings in  
1995.  
Corporate Unit Deutsche Aerospace (DASA)  
The operating environment of Deutsche Aerospace deteriorated  
further in 1993. The result was a decline in business in virtually all  
areas. We are reacting to these dramatic changes with a rigorous  
program to improve structures, adjust capacity and reduce costs.  
Greater efficiency is essential if we are to continue to have an ac•  
tive role in global markets. We have also intensified our policy of  
partnerships with other companies to further strengthen our posi•  
tion in the world markets. The comprehensive programs to improve  
profitability will continue.  
Friedrichshafen into AEG.  
The goal of these measures and of  
the restructuring program is to close  
loss-making activities and to  
strengthen the strategic basis and  
earnings capability of the future fields  
of activity in Automation, Diesel  
Engines, Rail Systems, Energy Sys•  
tems Technology, Microelectronics  
and Industrial Holdings.  
The process of separating strate•  
gic group management tasks from  
operative business responsibilities,  
initiated in 1993, will continue. Staf•  
fing in the central group functions was  
slashed in 1993 to approximately 25%  
of former levels. Effective January 1,  
Crisis in the Aerospace Sector  
Necessitates Structural Changes  
Deutsche Aerospace was hurt si•  
multaneously by worldwide economic  
weakness, the cancellation of long-  
term budgets and the structural crisis  
affecting the airlines. In addition, com•  
petition in the world market is becom•  
ing fiercer. Many competitors receive  
increasingly massive state support in  
the USA and Japan, and new competi•  
tors are emerging from Eastern Europe  
and the Far East.  
1994, the required central service  
functions are performed in indepen•  
dent units, with a view to improved  
efficiency and more transparent costs  
and structures. Despite the first signs  
of a stabilizing economic environment  
in 1994, there have been no signs of  
Deutsche Aerospace 29  
The fastest and safest mode of transport of our times must be serviced and refuelled before  
every take-off The four-engine A340 has been in use on regular services since April, 1993. On  
its record-breaking 48-hour flight around the world in June, 1993, all previous records for long-  
haul flights were shattered and new standards were set in international air travel.  
Deutsche Aerospace reacted to the  
The acquisition of a majority stake  
dramatic changes in its economic envi• in the Dutch aircraft manufacturer,  
In South America we initiated  
a further project to expand our com•  
mercial satellite business. As the  
leader of a consortium with Aero•  
spatiale and Alenia, we entered into a  
24-year license contract with the  
Argentinian Comision Nacional de  
Telecomunicaciones (CNT) for the  
commercial satellite-based communi•  
cations system, Nahuel. The operating  
company, Nahuelsat S.A., was formed  
in December, 1993. We also entered  
negotiations for the formation of a  
satellite-manufacturing joint venture.  
ronment with a rigorous package of  
programs to make structures more ef•  
ficient, adjust capacity and reduce  
costs. In addition, the international  
competitiveness of DASA will be pro•  
tected and expanded through an ag•  
gressive and targeted presence in the  
market.  
Fokker, significantly improved our  
strategic position in the Aircraft  
division. We now have a complete  
product range from small turboprop  
aircraft to large jets. We are also, to•  
gether with our Airbus partners Aero•  
spatiale, British Aerospace (BAe) and  
Construcciones Aeronauticas (CASA),  
working with Boeing on a feasibility  
study for a very large commercial air•  
The Aircraft division needs to re•  
organize production structures and  
eliminate excess capacity through con• craft.  
solidation. In the Space Systems and  
One promising development for  
Propulsion Systems divisions, new  
structures were put into place during  
the future came in the form of a  
"memorandum of understanding"  
signed by four aero-engine manufac•  
Sales Down in Almost Every Area  
1993. Considerable resources are  
At DM 18.6 billion, sales of the  
being put into expanding non-military  
activities in the Defense and Civil  
Systems division.  
turers, MTU, Snecma, Pratt & Whitney Deutsche Aerospace group, including  
and General Electric to develop a new  
the newly acquired Fokker group,  
were 10% below the comparable sales  
for the previous year. With only a few  
exceptions, business in all areas was  
down. Especially affected were the De•  
fense and Civil Systems and the Pro•  
pulsion Systems divisions. The Space  
Systems division also experienced  
substantially lower revenues due to in•  
voicing factors. Business in Germany  
weakened by 16% to DM 5.8 billion  
engine in the thrust range between  
12,000 and 20,000 lbs.  
One key element of our ongoing  
effort to secure the company's future  
is our market offensive in China,  
South East Asia and America.  
We intensified our activities in  
Eastern Europe and the People's  
Republic of China by concluding a  
number of cooperation agreements  
in various aerospace fields.  
International Partnerships  
to Safeguard the Core Business  
Through increased cooperation  
with international partners, a competi• despost Telekom (51%) and ANT  
Deutsche Aerospace (24.5%  
share), together with Deutsche Bun-  
(
1992: DM 6.9 billion). Foreign sales  
tive critical mass will be attained in a  
contracted market. Multilateral part•  
nerships are inevitable, given the com• the partners in satellite communica•  
plexity and growing financial costs of  
tions will be together. Supported by lo•  
large aerospace projects, the globaliza• cal companies, Romantis will offer lan•  
tion of markets, the intensity of com•  
petition and the reductions in public  
funds. Through numerous acquisi•  
tions, joint ventures and partnerships  
at the national and international level,  
we have achieved a strategic position  
that improves our situation in the  
world market.  
Bosch Telekom (24.5%) founded Ro•  
mantis GmbH. Now the activities of  
fell by 7% to DM 12.8 billion (1992:  
DM 13.8 billion) and accounted for  
6
9% of group sales. Military sales fell  
to 29% of total business volume,  
largely as a result of the disproportion•  
ate decline in Military purchases  
and the first-time inclusion of Fokker.  
Incoming orders were also down,  
totalling DM 15.6 billion or 8% less  
than the orders for the previous year.  
However increases in customer orders  
were received by the Propulsion Sys•  
tems division and by our joint venture  
with AEG, TEMIC Telefunken micro•  
electronic GmbH.  
guage (telephone), data and television  
services in Eastern Europe via the  
Intelsat VI satellite, and establish the  
link-up with Western telecommunica•  
tions networks. Accordingly, Romantis  
is making an important contribution to  
infrastructural expansion in Eastern  
Europe.  
3
0
Deutsche Aerospace  
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Satellite aerials undergo intensive tests before going into orbit. In the compact range test  
facility, the conditions in which aerials will be operating in space are simulated. Satellite  
aerials play a key role in space missions, functioning as the communication link between the  
satellite and the ground control center. Deutsche Aerospace and its subsidiary, Dornier, are  
the world's leading suppliers of aerials for communications and remote sensing satellites.  
Renewed Emphasis on  
Aircraft Activities  
Space Systems Influenced  
By Large Projects  
Workforce Reductions and  
Reduced Working Hours Inevitable  
Deutsche Aerospace had 86,086  
(1992: 94,293) employees at the end  
of 1993, including 3,560 trainees and  
apprentices. Deutsche Aerospace AG  
With the integration of Fokker, the  
Sales revenue in the Space  
Aircraft division now contributes more Systems division are influenced to a  
than half of the total consolidated  
significant extent by large projects. In  
sales. Revenues of DM 10.3 billion were contrast to the previous year, no indi•  
slightly lower than the comparable  
figure of the previous year. The  
vidual major projects were invoiced in employed 17,363 (1992: 20,051) peo•  
1993, which resulted in a considerably ple, including 843 trainees and ap•  
Deutsche Aerospace Airbus business  
unit was almost able to compensate  
lower sales level of DM 1.4 billion  
prentices. The persistent worsening of  
(1992: DM 1.9 billion). Large contribu• economic conditions led to extensive  
for lower sales in other units. The first tions, once again, came from ongoing  
underutilization of capacity in all  
areas of the group. This made further  
reductions in the workforce unavoid•  
able. In addition, reduced working  
hours had to be implemented for over  
half of the workforce.  
46,863 (comparably calculated for  
1992: 51,781) people were employed  
in the Aircraft division, 4,463 (1992:  
4,864) in Space Systems, 12,387  
(1992: 14,369) in Defense and Civil  
Systems and 15,347 (1992: 16,338) in  
Propulsion Systems. In other business  
activities, which largely comprise the  
joint venture TEMIC, which is in•  
cluded on a pro rata basis, and medi•  
cal systems, 7,026 (comparably calcu•  
lated for 1992: 6,941) were employed.  
deliveries of the Dornier 328 did not,  
from a sales perspective, have an  
impact during 1993.  
invoicing in the Ariane and Columbus  
projects. Customer orders of DM 1.5  
billion (1992: DM 1.7 billion) also  
failed to reach the high level of the  
Incoming customer orders fell  
again, to DM 7.6 billion (1992: DM 9.1 previous year.  
billion). While new orders in the Deut•  
sche Aerospace Airbus business unit  
remained at the very low level of the  
year 1992, the Tornado contract from  
Saudi Arabia led to a marked increase  
in military aircraft orders. All other  
business units, however, experienced  
drastic declines in customer orders.  
Defense:  
Sales Now Sharply Down  
The downward trend in customer  
orders experienced by the Defense  
and Civil Systems divisions for a num•  
ber of years was for the first time  
fully reflected in sales for 1993.  
At DM 2.8 billion (1992: DM 3.6  
billion), revenues were 21% lower  
than in the previous year. The already  
very low level of customer orders de•  
clined further by 6% to DM 2.3 billion  
(1992: DM 2.4 billion).  
Propulsion Systems:  
Decline in Sales  
in All Business Units  
Sales in the Propulsion Systems  
division dropped 13% from the pre•  
vious year's level to DM 3.1 billion  
(1992: DM 3.6 billion). Especially hard  
hit was the Aircraft Propulsion Sys•  
tems business unit. However, one  
major order for each of the business  
units Aircraft Propulsion Systems and  
Propulsion Systems Land/Marine  
Applications resulted in a considerable  
increase in customer orders to DM 3.2  
billion (1992: DM 2.8 billion) after a  
low overall level the previous year.  
3
2
Deutsche Aerospace  
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Capital Expenditures Decreased  
Due to the difficult economic situa•  
tion, we have limited our capital ex•  
penditures to the minimum necessary  
Outlook  
During 1994, we expect a modest  
increase in sales revenue. In the Space  
Systems division, higher revenues can  
level. As a result and despite the first- be expected particularly due to deliv•  
time consolidation of Fokker, capital  
expenditures were lower than in the  
ery of the ERS-2 satellite. We also an•  
ticipate moderate growth in the Pro•  
previous year. We invested DM 1.0 bil• pulsion Systems division. In the Air•  
lion (1992: DM 1.2 billion) in property, craft division positive results can be  
plant and equipment in the group and  
DM 100 million (1992: DM 200 mil•  
lion) in Deutsche Aerospace AG. Pro•  
duction was reorganized to accommo•  
date new technological and structural  
challenges and non-military products.  
We also put considerable funds into  
expanding the production of airbags.  
expected only from deliveries of the  
Dornier 328, which began at the end  
of 1993. In the Defense and Civil Sys•  
tems division, increase of production  
in the Stinger program to the target  
volume should offset declines in other  
projects. We will continue through to  
1996 with the comprehensive program  
already initiated to cut costs and  
improve performance. Even with  
numerous programs to improve effi•  
ciency and structures, a further reduc•  
tion in capacity is essential. By the  
end of 1996, we must eliminate  
approximately 10,000 more jobs and  
close several plants. This will reduce  
overhead to be highly competitive and  
DASA's position in international com•  
petition will be significantly enhanced.  
We have initiated an internally funded  
product development program to in•  
crease market penetration which will  
provide a strong basis for future  
growth.  
Commissioned Research  
and Development  
Expenditures on research and de•  
velopment projects for third parties  
also fell as a result of overall weak  
business conditions to DM 3.9 billion  
(1992: DM 4.5 billion), representing  
2
1% of sales revenue. Our in-house  
research and development funding to  
protect our future operations was at  
the previous year's level of approx•  
imately DM 0.9 billion or 5% of sales  
revenue. Total research and develop•  
ment expenditures amounted to DM  
4.8 billion (1992: DM 5.5 billion). In  
the Aircraft division, expenditures  
were concentrated on the Airbus  
A330/A340, Dornier 328 and Euro-  
fighter (EF 2000) programs. In Space  
Systems, the main emphasis was on  
the ERS-2 (European Remoted Sensing  
Satellite), Cluster, Columbus, Polar  
Platform and Ariane. In the Defense  
and Civil Systems division, we concen•  
trated particularly on the Pars 3 pro•  
gram and also expanded activities in  
non-military sectors. In the Propulsion  
Systems division we focused on the  
EJ 200 engine for the EF 2000, devel•  
opment of non-military engines and  
two new diesel engine series.  
Corporate Unit  
Daimler-Benz InterServices (debis)  
There was a sharp increase in  
business with customers outside the  
Daimler-Benz group, which increased  
from 79% to 83% as a proportion of  
total revenue. In financial services  
and bartering, almost all business was  
with external customers; the share of  
external business in the other divi•  
sions was in excess of 50%.  
debis increased its total 1993 revenue by 20% to DM 9.5 billion. In•  
tensified competition on prices and terms caused us to initiate a  
vigorous campaign in 1993 to reduce costs and increase  
efficiency. The international emphasis of our activities was further  
increased in all divisions.  
Services sector also affected  
by the recession  
Although additional acquisitions  
were made during 1993, the increase  
in revenues of debis was largely due to  
growth in existing areas of the com•  
pany. The Financial Services division  
The services sector was affected  
by the adverse world economic situa•  
tion in differing degrees. Suppliers of  
information technology services for in• had a substantial expansion in busi•  
dustry suffered from the reduction of  
ness, which was due to increasing  
project orders. Investment in standard internationalization as well as an  
software also declined sharply. How•  
ever some service sectors were un•  
affected by the recession. In Germany,  
vehicle leasing acquisition reached, to  
a large extent, the high level of the  
expanded range of services offered.  
Large Investment in  
Leased Equipment  
Additions to leased equipment  
previous year, despite reduced vehicle grew by 5% to DM 6.2 billion.  
sales due to the low level of economic  
Our investment in property, plant  
activity. In the USA, leasing was popu• and equipment increased in 1993 by 16%  
lar and led to an increase in demand  
for capital goods. Demand for mobile  
communication services greatly  
increased.  
to DM 200 million. As in the past, this  
largely comprised data processing  
equipment. Modern computer operat•  
ing systems were installed in our for•  
eign financial services companies.  
debis: Continued Growth  
debis increased its consolidated  
revenues during 1993 by 20% to  
DM 9.5 billion. 51 % of total revenue  
was generated in Germany, 10% in  
other European Union (EU) countries,  
31 % in the USA and 8% in other mar•  
kets. Total revenue include sales reve•  
nue of DM 8.7 billion and interest in•  
come from sales financing receivables  
of DM 0.8 billion. Consolidated net in•  
come of debis declined in 1993 to DM  
18 million (1992: DM 122 million).  
Daimler-Benz InterServices (debis)  
35  
To be able to receive calls anywhere at any time is now an essential requirement in business.  
In the private sector too, while still considered a luxury, mobile communication is becoming  
increasingly popular and, in 1993, was one of the few growing markets in Germany, debitel  
further improved its position in this promising industry and with 100,000 customers  
strengthened its role as the leading supplier of mobile communication services in Germany.  
8
,812 Employees  
Financial Services:  
in the debis group  
Further Internationalization  
The consolidated companies of the  
debis group employed 8,812 people at  
the end of 1993, an increase of 7%  
from the previous year. 7,527 people  
The Financial Services division in•  
creased its total revenue - excluding  
the 50% owned subsidiary Solovam,  
which was not consolidated - by 18%  
were employed in Germany and 1,285 to DM 6.7 billion.  
abroad. Of the total, 6,196 were em•  
ployed in the Systemhaus division,  
In Germany, the favorable trend  
was assisted by passenger car leasing  
1,570 in Financial Services, 351 in In• programs in cooperation with  
surance Brokerage, 84 in Trading, 319 Mercedes-Benz AG.  
in Marketing Services, 173 in debitel  
In the USA, an increase in com•  
and 23 in dIM (debis Real Estate Man• mercial vehicle contracts compensated  
agement). 223 interns were receiving  
training at debis at year end.  
for declines in passenger car con•  
tracts. The newly founded Mexican  
subsidiary made a positive contribu•  
tion to sales and income on an operat•  
ing basis.  
debis Systemhaus:  
debis Systemhaus increased its  
total revenue by 7% to DM 1.7 billion.  
In the early part of 1993 we estab•  
This growth was contributed primarily lished another leasing and sales financ•  
by the CCS group. However, the Cap  
debis group suffered because of the  
difficult economic conditions which  
negatively affected the software prod•  
ucts market. The results of this divi•  
ing company in Denmark. Now debis  
offers financial services in 13 coun•  
tries.  
New business worldwide in•  
creased by 22% to 195,000 acquisi•  
sion were further depressed by neces• tions, for a volume of DM 12.9 billion.  
sary provisions for future restructur•  
ing programs.  
Diebold, the third subdivision of  
debis Systemhaus, further increased  
At year-end, the total number of con•  
tracts outstanding totalled 435,000,  
corresponding to a total value of DM  
22.8 billion, debis Aviation Leasing  
its total revenue and profit in the mar• supported the financing of four aircraft  
ket for high technology and manage•  
ment consulting services.  
during 1993. Two operating type  
leases were completed, for an Airbus  
A 340 and another for an Airbus  
A 300.  
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Creativity is the name of the game: modern bartering methods offer many different possibilities  
for promoting trading relations between contrasting markets and opening up new sales  
channels. During 1993, debis Trading facilitated exports worth DM 500 million to countries  
weak in foreign currency. Particularly in the Asian region, substantial bartering transactions  
were concluded.  
Insurance Brokerage  
In May, 1993, 2 MTel, the French  
In a market characterized by large joint venture with Metro, commenced  
insurance claims, debis Assekuranz  
GmbH steadily expanded its volume  
of business; commission totalled  
DM 68 million on a premium volume  
of DM 0.6 billion.  
operation.  
Outlook  
debis is ready for the diverse  
demand trends and the intense com•  
petition in the individual services  
markets. With our superior range of  
individual services and complete  
systems, we have excellent prospects  
to increase earnings and total  
Trading:  
Successful Partnerships  
The services of the Trading divi•  
sion facilitated exports totalling DM  
5
00 million in 1993 to countries weak  
revenues. Additionally, our business  
dealings with external customers will  
continue to increase.  
in foreign exchange. Total revenue  
amounted to DM 371 million (1992:  
DM 436 million). The decrease in  
1
993 is attributable largely to invoic•  
ing factors.  
In December, 1993 debis AG pur•  
Joint Venture Companies  
chased the remainder of debis Interna•  
tional Trading GmbH from the Treu-  
handanstalt.  
In its first full financial year, TEMIC focused on expanding its inter•  
national structures in the fields of development, manufacturing and  
sales. Mercedes-Benz CharterWay swiftly became established in its  
markets; demand for long-term Mercedes-Benz commercial vehicle  
rental, which this company provides, is high.  
Marketing Services:  
Further Acquisitions  
In spite of the difficult economic  
environment, the Marketing Services  
division increased its 1993 revenues  
to DM 561 million (1992: 205 million).  
This is primarily due to the first time  
consolidation of GFMO, Gesellschaft  
fur Media Optimierung mbH, a com•  
pany acquired in 1992.  
TEMIC Telefunken  
microelectronic GmbH -  
Reorganization and Expansion  
of Global Structures  
In TEMIC's first full financial year,  
the focus was on a reorganization of  
the various business activities and an  
expansion of the global development,  
production and distribution structures.  
The volume of business increased  
to DM 1.5 billion, although depres•  
sed markets handicapped sales to  
the consumer goods and automotive  
industries.  
The semiconductors sector now  
unites five of the world's leading spe•  
cialists in the field of application-  
specific, customer-oriented semicon•  
ductor products: TELEFUNKEN in  
Heilbronn, Siliconix in Santa Clara,  
California, MATRA MHS in Nantes,  
France and Dialog Semiconductor in  
Mobile Communication Services:  
Dynamic Market Growth  
As a provider of mobile communi•  
cation services, debitel profited from  
the dynamic market growth in Ger•  
many which followed the entry into  
service of the 'D-networks'. Our joint  
venture with Metro is now the market  
leader among the carrier-independent  
service providers. Total customers  
served were 106,000 with a total  
revenue of DM 152 million.  
Joint Venture Companies 39  
Long-term rental of Mercedes-Benz commercial vehicles under the trade name Mercedes-Benz  
CharterWay enjoys growing popularity with our customers. It is not difficult to see why:  
Mercedes-Benz CharterWay takes care of vehicle administrative duties, residual value risks,  
repair, maintenance, taxes and tolls and guarantees transport capacity at all times.  
CharterWay provides immediate assistance if a vehicle is out of commission.  
Munich and Swindon, United King•  
dom, as well as EUROSIL in Hong  
Kong. This group is supported by the  
TEMIC Integrated Circuits Develop•  
ment Center (EZIS) in Ulm, Germany.  
TEMIC's semiconductors and design  
ideas are sold around the world in the  
following target markets: computers,  
telecommunication, motor vehicles,  
entertainment electronics and indus•  
trial applications. In order to remain  
abreast of technological development,  
we concluded a license agreement  
Micro-switch and foil switch systems  
provide the control interface between  
man and machine in a great many in•  
dustrial products and systems. In this  
field, we recorded a growth in sales of  
vehicle electronics systems.  
In the vehicle equipment field we  
are developing innovative systems  
with a high electronics content and  
Mercedes-Benz CharterWay  
Since the start of business in early  
summer, 1992, long-term rental of  
Mercedes-Benz commercial vehicles  
under the tradename Mercedes-Benz  
CharterWay has become a vital tool of  
sales promotion. This is illustrated,  
among other things, by the numerous  
requests for information which have  
high quality standards. Our market po• been received from markets where  
sition was significantly strengthened  
by the latest generation of control  
units for anti-lock braking systems  
CharterWay is not yet offered. To date,  
CharterWay's activities are located in  
Belgium, Germany, France, the United  
Kingdom and the Netherlands. In  
concerning development and manufac• (ABS) and the sensor systems and gas  
ture of a new 8-bit micro controller ar• generators for airbags and belt-  
chitecture with the American semicon• tensioners. Business in the field of  
these markets, rental contracts for ap•  
proximately 3,000 vehicles had been  
initiated by the end of 1993, most of  
which in the second half of the year.  
Following the successful launch phase,  
we are confident that our CharterWay  
concept will become even more firmly  
established in the market. The striking  
benefits for the customer, who incurs  
no risk relating to the sale of the used  
vehicle, repair and maintenance and  
downtime provides a promising basis.  
The relief from administrative vehicle  
ductor manufacturer INTEL. In the  
framework of long-term cooperation,  
we concluded an agreement with Ja•  
pan's Mitsubishi Electric Corporation,  
so that we will continue to be assured  
access to leading CMOS technology.  
fractional horsepower motors for in•  
stallation in the exterior mirror and  
seat adjustment, window control and  
heating and ventilation systems of  
motor vehicles was static due to de•  
pressed conditions in the automotive  
We took our first step into the growing industry. However, sales of anti-theft  
Chinese market with the formation of  
Simconix in Shanghai - a joint venture  
between Siliconix Inc., Santa Clara,  
and the Shanghai Institute of Metal•  
lurgy - which will produce and test  
semiconductor components.  
systems are increasing.  
We are now suppliers to more  
than half of the world's largest auto•  
motive manufacturers. These suc•  
cesses prompted us to construct a new management tasks is also a great  
production facility at the TEMIC plant  
in Nabern and, at considerable invest•  
ment cost, to expand capacity at the  
benefit.  
In the microsystems field we  
develop, produce and market custom-  
made solutions consisting, for example, Aschau plant. We also opened a new  
of sensors, hybrids and application-  
specific integrated circuits (ASICs).  
production plant for microelectronics  
and vehicle equipment in Nuremberg  
and commenced construction of a  
plant in Mexico for the manufacture of  
electronic components and systems  
for the NAFTA markets.  
The cable harness activities of  
TEMIC Telefunken Kabelsatz GmbH  
(TKG) in Muhlheim, which specializes  
in development and manufacture of  
cable harnesses for wide-ranging ap•  
plications in the automotive industry,  
were taken over on December 31,  
1993, by the American company  
Electro-Wire Inc., of Dearborn,  
Michigan.  
4
0
Joint Venture Companies  
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Central Corporate Functions within the Group  
Research and Technology  
The increasing significance for the  
group of information technology was  
emphasized in 1993 with the estab•  
lishment of a separate research sector.  
The information technology re•  
searchers in Ulm develop new com•  
puter applications, technologies and  
concepts.  
Daimler-Benz has concentrated its research activities, which are  
acquiring increasingly international orientation, at its new Ulm  
Research Center. The research sectors carry out projects in close  
collaboration with the various corporate units and with diverse  
institutions within and outside Germany. An example of success•  
fully implemented synergy is the interdisciplinary TRAFFONIC  
project for vehicle and transport research.  
The Enterprising Researcher  
Daimler-Benz Research Center  
in Ulm Completed  
In a communication process en•  
compassing the entire research divi•  
sion, a new model of the "enterprising  
researcher" has been developed and  
incorporated into the Daimler-Benz  
research program. This model of  
"strategy-oriented entrepreneurial  
management" is based on the re•  
searcher's displaying an "enterprising  
The Daimler-Benz Research Cen•  
ter on Oberer Eselsberg, to the north•  
west of Ulm's city center, commenced  
operations with an opening ceremony  
on October 19, 1993. Building costs  
amounted to DM 270 million. The Re•  
search Center, which can accommo•  
date 1,000 employees, makes a signifi• spirit within the enterprise". The en•  
cant contribution to the scientific city  
terprising researcher makes full use of  
of Ulm. Alongside the universities, the the opportunities provided to him re•  
affiliated institutes run jointly by in•  
dustry and the state and a "Science  
garding visions, goals and resources  
within the overall strategy of his field  
Park" geared to the needs of small and of research.  
medium-sized companies. The existing  
and continually improving close con•  
tact between the individual institutes  
is intended to promote exchange be•  
tween academic and industrial re•  
search both within and beyond the  
frontiers of the growing technological  
region of Ulm.  
In order to deepen the knowledge  
required for this purpose in the fields  
of strategic competence and orienta•  
tion towards the market and the cus•  
tomer, the research and technology  
division, together with the training sec•  
tor of Daimler-Benz AG, has developed  
a management skills program encom•  
passing the topics of innovation man•  
agement, strategy and marketing.  
At the new Daimler-Benz Re•  
search Center, research projects are  
carried out for our corporate units and  
fields of activity. Additionally as a  
Globalization of Research  
"
hub of knowledge" for the group it  
Activities in the field of research  
and technology are becoming increas•  
ingly internationalized. The trends are  
towards co-operation with research in•  
stitutes throughout the world, student  
also develops key technologies which  
provide an important basis for secur•  
ing competitive advantages on the  
growing markets of tomorrow. The  
spectrum of activities includes:  
Microelectronics,  
Functional and structural  
materials,  
Production research and the  
environment,  
•
Energy research and  
Information technology.  
42  
Research and Technology  
and employee exchange programs  
with internationally renowned re•  
search institutes and the involvement  
Advances in Vehicular  
and Transport Research  
The TRAFFONIC synergy program  
of scientists in the research and devel• has been brought to a successful con•  
opment activities of group companies  
clusion after a period of more than  
outside Germany. Examples of this are: four years. Mercedes-Benz, Deutsche  
Aerospace and various Daimler-Benz  
Industrial cooperation with Aero•  
spatiale (France), United Technol•  
ogies (USA) and Mitsubishi  
research departments have jointly de•  
veloped new vehicular functions. In•  
terdisciplinary expertise across the  
(Japan),  
group was indispensable for the note•  
worthy successes achieved, especially  
in the fields of radar sensor technol•  
ogy and speech processing in road  
transport. With the support of the cor•  
porate unit Deutsche Aerospace and  
the TEMIC joint venture, many of the  
TRAFFONIC projects are now being  
EU-subsidized European research  
and wordwide joint research  
projects and  
Research cooperation with compe•  
tent research institutes in the CIS  
countries and in the USA.  
Such cooperation serves to incor•  
porate international expertise and new further developed to production  
impulses and experience into research standard.  
work. Tangible results have already  
been achieved in the fields of mate•  
Traffic Management  
rials and material technologies, both of by Intertraffic  
which are crucial competitive factors  
in the design of future products.  
In 1993, Daimler-Benz AG ac•  
quired all the shares in ITF Intertraffic  
Gesellschaft fur Integrierte  
The AIT Program:  
Verkehrsmanagement-Systeme, which  
previously all corporate units of the  
Daimler-Benz group held shares. The  
company brings together the know-  
how of the Daimler-Benz group in the  
fields of traffic management systems,  
transport systems and information  
technology.  
Pan-European User Initiative  
A further example of interna•  
tionalization is the pan-European in•  
dustrial user initiative "Advanced In•  
formation Technology in Design and  
Manufacturing" (AIT) launched by the  
Daimler-Benz research division.  
The current situation in European  
industry shows that the suppliers of  
ITF is playing a leading role in im•  
plementation of the traffic manage•  
information technology (IT) do not ade• ment system STORM. This project re•  
quately cater to the needs of users.  
quires the Daimler-Benz research divi•  
Headed by Daimler-Benz, 17 large Eu• sion, the Transport Ministry of Baden-  
ropean IT users from the automotive  
and aviation industries have, accord•  
ingly, devised a project which is be•  
ing sponsored by the European Union  
Wurttemberg, the City of Stuttgart and  
various other major companies to  
jointly conduct trials of advanced traf•  
fic information and advice systems in  
the Stuttgart region. Data linkage be•  
tween public and private transport  
(EU). The objective of which is to de•  
termine future IT requirements in de•  
velopment and production, so that IT  
suppliers can develop appropriate so•  
lutions.  
In the sound lab: in 26 thousandths of a second, the airbag inflates into a balloon-like safety  
cushion. Scientists in Ottobrunn measure the blast from the gas explosion in their efforts to  
make the inflation process still more efficient. The Daimler-Benz research department carries  
out continuous development work on the airbag with a goal to provide even greater safety for  
the customer.  
provides the basis for the following six things, the mistakes made by the  
Contact-free charging devices for  
electric road vehicles,  
Contact-free vehicular drive mech•  
anisms,  
High-voltage power supply for  
locomotives and  
pilot projects:  
driver. With the help of psycholo•  
gical fault analysis, Daimler-Benz  
researchers have compiled error  
profiles for various vehicle categories  
and driver groups. The influences of  
stress, experience and age on error  
frequency have been evaluated.  
It has been shown, for instance,  
that high stresses placed on the driver  
in traffic can lead to mistakes;  
traffic information system  
individual guidance system  
constantly updated park and ride  
information  
connections information  
fleet management and an  
aid call system.  
On-board power supply for all  
types of vehicles.  
Daimler-Benz researchers from  
the automation field in Frankfurt are  
currently preparing the necessary  
technology and systems for the pro•  
duction and operation of such  
medium-frequency power transmis•  
sion units.  
The STORM project infrastructure  
will be completed by the end of 1994  
and will undergo trials through the  
end of 1995.  
however, there was no evidence that  
driving errors result in higher  
stress levels. The hypothesis that  
Also, ITF will participate in a com• increased experience levels reduce  
pany which builds, operates and ar•  
ranges financing for individualized  
traffic management systems.  
the frequency of errors was con•  
firmed.  
Mobile Computing and the  
Another experiment disproved the  
commonly held belief that the fre•  
quency of driving errors increases  
with age. Here, too, experience plays  
the decisive role: older drivers with  
a greater level of experience made  
the least errors of all groups in•  
vestigated.  
Automatic Reading of Handwriting  
Information is only of value when  
it is available at the right time, at the  
right place and in the right language.  
Accordingly "Mobile computing" is  
one of the most important require•  
ments placed on modern information  
technology.  
The Channel Tunnel Vehicle STTS  
in Operation  
Following the completion of the  
tunnel under the English Channel, the  
innovative inductive track guidance  
system, which we developed for the  
Service Tunnel Transport System  
In the field of "Mobile subscribers  
to networked systems", a basic infor•  
mation and communication technology  
system is currently being created at  
the Daimler-Benz Research Center in  
Ulm. Mercedes-Benz branches are cur•  
rently testing mobile computing for  
mobile recording of repair and inspec•  
tion orders.  
In a different field of information  
technology, Daimler-Benz researchers  
have been achieving international ac•  
claim and successfully applying their  
findings in automatic letter sorting  
systems of AEG Electrocom: on the  
basis of image and handwriting anal•  
ysis and of speech and graphic recog•  
nition, they have developed concepts  
and methods for the automatic reading  
of handwriting. With a recognition rate  
of over 80%, they have rapidly at•  
tained a leading international position.  
(
STTS), will commence operations. The Non-Contact Battery Charging in the  
track-guided special vehicles, devel•  
oped by Mercedes-Benz AG in collab•  
oration with the Daimler-Benz re•  
search division and AEG, travel along  
the tunnel's 4.8 meter (approximately  
Electrically Powered Vehicle  
The transmission and conversion  
of electrical energy is also showing  
technical advances.  
When power is transmitted at  
1
6 feet) wide central shaft, which  
frequencies in excess of 20 kHz, the  
space and weight requirements of  
electromagnetic components along  
with losses occurring in them, are con•  
siderably reduced. More importantly,  
electrical power can be transmitted at  
these high frequencies over an air gap,  
without direct contact. New, rapidly  
switching, economically operating  
semiconductor components are now  
serves as a maintenance facility and  
an escape route. Tests by the tunnel  
operator confirmed the system's effi•  
ciency and its robustness in the event  
of a malfunction.  
Psychological Analysis  
of Driver Errors  
Motor vehicles move in traffic  
more safely when they meet the needs making this frequency range viable.  
and cater to the individual characteris• This opens up a broad spectrum of  
tics of the driver. To make progress in  
this area, vehicle developers must be•  
come familiar with, among other  
highly interesting product oppor•  
tunities, such as:  
4
4
Research and Technology  
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Microelectronics and  
New Materials - New Opportunities  
for Energy and the Environment  
The characteristics of new mate•  
rials are opening up a variety of attrac• lithography, with subsequent return of  
tive applications to Daimler-Benz in  
the field of energy and the environ•  
investigating a closed process chain  
from the CAD model via prototype pro•  
duction, with such methods as stereo-  
Microsystems Technology  
Microelectronics research exper•  
tise is not only of benefit to products  
of the future. The Ulm Research Cen•  
ter incorporates a newly established  
the measured prototype to CAD data.  
"foundry" - a manufacturing center for ment.  
Future-Oriented Research -  
gallium/ arsenide semiconductor com•  
ponents - where transistors, circuits  
and other products for the Daimler-  
Benz group are produced. External  
customers are now supplied with  
tailor-made components; as a rule,  
these are small series of a few hun•  
dred chips, the production of which  
would not be cost effective in a com•  
mercial semiconductor production  
facility.  
A major focus of continuing devel• and the Searching Internal Review  
opment for materials scientists at the  
The Berlin "Research, Technology  
Ulm Research Center is functional ma• and Society" group processes non-  
terials, for example for electrodes and  
technological future-oriented knowl•  
membranes in batteries for electrically edge in order to support the corporate  
powered vehicles. For future genera•  
tions of the "ZEBRA" sodium/nickel-  
chloride high-energy battery, jointly  
developed by the Anglo-American  
corporation, South Africa, and AEG,  
Daimler-Benz researchers are cur•  
units in operative and strategic pro•  
cesses. On the basis of research re•  
sults, investigations held to determine  
whether existing and planned prod•  
ucts, services or organizational princi•  
ples have a realistic future.  
In a wide range of corporate prod• rently developing new materials with  
ucts such as passenger cars or rail ve• a goal to reduce operating tempera•  
The researchers have identified  
for example, the future trends that will  
be of relevance for the company and  
its products in the years to come. The  
hicles, in aviation and aeronautics or  
tures, costs and enhancing func•  
in drive systems and automation tech• tionality.  
nology, intelligent sensor and actuator  
components known as smart-power  
circuits are incorporated (addressable, cell" research objective. This cell pro•  
diagnosable and self-monitoring sys•  
duces electricity from any combustible  
tem solutions), which are being devel• gas, for example natural gas or hydro•  
oped by the research division in close  
contact with technological develop•  
ments. Using this technology, a con•  
trol circuit for reluctance motors used  
for positioning exterior mirrors on pas•  
senger cars is being developed to•  
gether with TEMIC TELEFUNKEN mi•  
croelectronic GmbH, Heilbronn.  
Environmental compatibility is the interdisciplinary trend analyses are  
supreme goal in the "solid oxide fuel  
grouped according to the following  
observation fields:  
Economic framework data  
Socio-demography  
The environment  
Energy  
City planning and area develop•  
ment  
gen without a flame, steam or rotating  
turbine blades, to an efficiency factor  
of 60%. The development of appropri•  
ate electro-ceramics, combinable flat  
cells and of integrating and connecting  
technology the Daimler-Benz re•  
searchers are making the required  
know-how available for practical appli•  
cation.  
Transport  
Society, values and behavior  
The working world and leisure  
time behavior  
Wheel and suspension accelera•  
tion on road vehicles will, in the  
future, be measured by micro-  
mechanical sensors integrated on a  
single chip the size of a pinhead,  
which convey this data to control  
Companies.  
Production Research for the  
This is complemented by a re•  
search audit; carried out by internal  
and external experts of world renown.  
This procedure tests our own research  
activities for efficiency, effectiveness  
Industrial Society of Tomorrow  
1993 saw the initiation of the In•  
telligent Manufacturing System (IMS)  
units. These new acceleration sensors, research program, designed on a  
developed by researchers at the  
Munich-Ottobrunn site, are about to  
go into series production.  
global scale as a three-way alliance be• and quality. The customers of the  
tween the USA, Japan and Europe. IMS Daimler-Benz research sector expect  
has the objective of standardizing in•  
dustrial production and to carry out  
products which not only equal or, in  
most cases, exceed any comparison  
comprehensive data integration - from with the world's best in terms of tech•  
placement of orders, development and  
manufacture to ultimate distribution.  
As part of the "Rapid Product Develop•  
ment" pilot project, Daimler-Benz is  
nology, but also ensure competitive  
pricing.  
Research and Technology  
Environmental Protection  
subsequently launched at the begin•  
ning of 1994. The purpose of this in•  
formation system is to coordinate the  
monitoring of facilities, processes and  
hazardous substances at the various  
plants and to ensure efficient docu•  
mentation of environmental protection  
within the company. The information  
from the plants' data banks is cen•  
trally coordinated to allow environ•  
mental protection to be monitored on a  
group-wide basis.  
As a result of amendments to waste legislation in Germany, more  
emphasis will be placed on residual materials from the manufacture  
of a product in the future. Together with newly implemented test  
audits at the production plants and product-based ecological  
records, the documentation of environmental protection has been  
further optimized by means of an environmental information  
system. The segregation and recycling of residual plastics as well  
as the use of natural materials have shown encouraging  
test results.  
New Waste Legislation  
An important focus of environ•  
mental discussion in 1993 concerned  
the amendments to waste legislation,  
which focuses on the prevention of  
Environmental Audit  
for Company Operations  
Prior to the EC directive on the  
voluntary environmental auditing of  
waste, through recycling. The new leg• production plants, test audits were  
islation covers all residual materials  
previously performed at two of the  
arising from a product from the manu• group's plants, so that experience  
facturing stage up to disposal. The  
manufacturer's responsibility has  
been extended to include designing  
products which can be recycled sev•  
eral times, produce minimal residual  
material and have a long service life.  
Additional significant changes in  
the field of waste policy are imminent  
in the form of the electronic waste and  
junked vehicle ordinances and the  
obligation on manufacturers to take  
back scrapped products; this will also  
affect the manufacturing and product  
development sectors. The recycling  
legislation and the two above ordi•  
nances have not yet been passed into  
law at the present time.  
could be gained with this instrument.  
These tests revealed that the legisla•  
tion, which has come into effect, is  
lacking detailed analysis criteria.  
Moreover, the directives reinforce na•  
tional differences which put German  
plants, with their high environmental  
standards, at a disadvantage over  
foreign plants.  
The Product-Related  
Ecological Balance Sheet  
With the further development of  
environmental legislation, attention is  
focusing on the overall "balance sheet"  
of the burden a product places on the  
environment in manufacture, opera•  
tion and disposal. The Daimler-Benz  
Environmental Information System  
Acquires Increasing Significance  
The central working group "Envi•  
ronmental Protection", comprising all  
chief environmental officers within the  
Daimler-Benz group, decided in May,  
1993 that the corporate unit, debis,  
should develop a group-wide environ•  
mental information system, which was  
Environmental Protection 47  
One recycling problem is solved: test facility at the Ulm Research Centre for categorized  
recycling of composite plastic materials on a purely mechanical basis. Synthetic waste is in  
this way turned into a new source of raw materials.  
Research Center in Ulm is placing  
more emphasis on this issue scien•  
tifically sound criteria for measuring  
Cooperation with Mitsubishi  
In November, 1993, Daimler-Benz  
and Mitsubishi agreed to commence with  
the environmental burden of a product two environmental protection projects.  
must be recognized at an early stage  
Within the framework of a joint re•  
and immediately incorporated into the search and development project, the  
manufacturing process. On the basis of recycling of mixed synthetic waste  
material and energy balance sheets,  
ecological weak-point analyses have  
already been completed for various  
products of the company.  
and electronics waste is being re•  
searched. In the second environmental  
cooperation project, it was agreed to  
work closer together in the recycling  
of metals from scrap vehicles. In addi•  
tion, both corporations displayed a  
renown cross section of their environ•  
Investments in  
Environmental Protection  
Investments in environmental pro• mental know how at the 'New Earth  
tection declined to approximately DM  
00 million which was less than that  
Environmental Show' in Osaka in  
December, 1993.  
2
invested in the previous year. The pri•  
mary reason for this is the high level  
Conservation of  
of investments capitalized in 1992, re• Natural Resources  
lating to the conversion to water based  
paints in car production. Additionally  
this also reflects the overall declining  
In a joint venture involving var•  
ious corporate units, UNICEF and the  
University of Para in Belem, Brazil, a  
level of investments in property, plant variety of materials and methods are  
and equipment.  
being tested for the industrial utiliza•  
tion of natural fibers and other renew•  
able raw materials. During 1993  
approximately 6,000 tons of natural  
materials such as coconut fiber and  
caoutchouc were processed into parts  
at small-scale Brazilian production  
plants and installed in buses and  
trucks by Mercedes-Benz do Brasil. In  
addition to various technological ad•  
vantages, such as a contribution to im•  
proved interior climate and greater air  
permeability, natural fibers are also of  
considerable ecological advantage,  
because they dispense with the use of  
exhaustible resources and no prob•  
lems are encountered in recycling or  
disposal.  
Recycling Synthetic  
Material Waste  
A further objective in corporate  
research is the development of pro•  
cesses for the recycling of complex  
synthetic waste materials created in  
production. The Daimler-Benz Re•  
search Center has succeeded for the  
first time in mechanically sorting com•  
posite synthetic waste created in the  
manufacture of dashboards into the  
original materials and reusing these in  
a high-quality recycling process. As  
soon as the sorting unit, currently un•  
dergoing endurance testing, is put into  
operation at the Worth plant, 1,500  
tons of waste can be prevented annu•  
ally and the pure plastic constituents  
reused in the manufacture of automo•  
tive components.  
This project is also significant in  
terms of development policy. Farmers  
are able to replace roving cultivation  
with an environmentally compatible  
basis of existence as suppliers of fiber  
to the automotive Industry.  
Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.  
Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.  
Here was a product or mood picture without text or figures.  
It was omitted in the pdffile to improve the usability of the file size.  
The five core topics of internationalization, concentration to the markets, innovative talent,  
entrepreneurship as the key to competitiveness and social responsibility were the focus of  
discussions at the Daimler-Benz Congress '93. The discussion of these issues by more than  
2,000 senior managers of the company generated a mood of enthusiasm which is making a  
valuable contribution to the integration of the group.  
Personnel  
we have in the past. To keep these  
redundancies to a minimum, however,  
new methods of adjusting capacity will  
also be considered. Emphasis will be  
placed on the flexible structuring of  
working time.  
A further focus of our personnel  
work, especially in this difficult year,  
was the maintenance and further  
development of our human resource  
potential. Training in efforts to raise  
skills continued in the Daimler-Benz  
group during 1993. Basic vocational  
and advanced training are considered  
permanent tasks designed to protect  
the future of the company and its  
employees.  
Difficult economic conditions in 1993 created adjustments to the  
workforce not only at the operating units but also at the Daimler-  
Benz holding. Reduced working hours in response to fluctuations in  
activity was also necessary. The workforce of the Daimler-Benz  
group was reduced by 6% to 366,736; affected by the decline, in  
particular, were Mercedes-Benz, AEG and DASA. We continue to  
improve the skills of our employees through basic and advanced  
training, which is a critical factor in maintaining our international  
competitiveness.  
Strengthening Competitiveness  
in a Difficult Environment  
The difficult economic conditions  
of 1993 made it necessary for the  
Daimler-Benz group to reduce its  
workforce and personnel costs. Releas•  
ing personnel, especially on the scale  
that is necessary, is always a painful  
step. The company not only loses  
knowledge and experience; the reduc•  
tions also impair the age structure of  
the remaining workforce.  
Employment Situation  
At year-end the Daimler-Benz  
group employed a workforce of  
366,736 (1992: comparably calculated  
388,888), on January 1, 1994 employ•  
ment in the group declined a further  
4,546 to 362,190. 284,576 people  
(1992: 302,464) were employed at the  
end of 1993 in Germany. In the corpo•  
rate units of the group the employ•  
In 1993, we tried to make the  
adjustments in a socially acceptable  
manner, particularly through normal  
attrition, early retirement and individ•  
ual severance agreements. In addition, ment situation was extremely  
reduced working hours were used to a strained.  
considerable extent to accommodate  
fluctuations in activity. In the corpo•  
rate units of AEG and DASA, however,  
redundancies were unavoidable in  
1993.  
It is our intention that future re•  
ductions in personnel, which are nec•  
essary if we are to secure our interna•  
tional competitiveness, will be carried  
out in as socially compatible a manner  
as possible, though the room for flex•  
ibility is more limited. The possi•  
bilities for taking advantage of attri•  
tion and early retirement have now  
been largely exhausted. Thus, we will  
not be able to avoid redundancies as  
5
0
Personnel  
Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.  
Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.  
Here was a product or mood picture without text or figures.  
It was omitted in the pdffile to improve the usability of the file size.  
The five core topics of internationalization, concentration to the markets, innovative talent,  
entrepreneurship as the key to competitiveness and social responsibility were the focus of  
discussions at the Daimler-Benz Congress '93. The discussion of these issues by more than  
2,000 senior managers of the company generated a mood of enthusiasm which is making a  
valuable contribution to the integration of the group.  
Personnel  
we have in the past. To keep these  
redundancies to a minimum, however,  
new methods of adjusting capacity will  
also be considered. Emphasis will be  
placed on the flexible structuring of  
working time.  
A further focus of our personnel  
work, especially in this difficult year,  
was the maintenance and further  
development of our human resource  
potential. Training in efforts to raise  
skills continued in the Daimler-Benz  
group during 1993. Basic vocational  
and advanced training are considered  
permanent tasks designed to protect  
the future of the company and its  
employees.  
Difficult economic conditions in 1993 created adjustments to the  
workforce not only at the operating units but also at the Daimler-  
Benz holding. Reduced working hours in response to fluctuations in  
activity was also necessary. The workforce of the Daimler-Benz  
group was reduced by 6% to 366,736; affected by the decline, in  
particular, were Mercedes-Benz, AEG and DASA. We continue to  
improve the skills of our employees through basic and advanced  
training, which is a critical factor in maintaining our international  
competitiveness.  
Strengthening Competitiveness  
in a Difficult Environment  
The difficult economic conditions  
of 1993 made it necessary for the  
Daimler-Benz group to reduce its  
workforce and personnel costs. Releas•  
ing personnel, especially on the scale  
that is necessary, is always a painful  
step. The company not only loses  
knowledge and experience; the reduc•  
tions also impair the age structure of  
the remaining workforce.  
Employment Situation  
At year-end the Daimler-Benz  
group employed a workforce of  
3
3
66,736 (1992: comparably calculated  
88,888), on January 1, 1994 employ•  
ment in the group declined a further  
4,546 to 362,190. 284,576 people  
(1992: 302,464) were employed at the  
end of 1993 in Germany. In the corpo•  
In 1993, we tried to make the  
adjustments in a socially acceptable  
manner, particularly through normal  
attrition, early retirement and individ• rate units of the group the employ•  
ual severance agreements. In addition, ment situation was extremely  
reduced working hours were used to a strained.  
considerable extent to accommodate  
fluctuations in activity. In the corpo•  
rate units of AEG and DASA, however,  
redundancies were unavoidable in  
1993.  
It is our intention that future re•  
ductions in personnel, which are nec•  
essary if we are to secure our interna•  
tional competitiveness, will be carried  
out in as socially compatible a manner  
as possible, though the room for flex•  
ibility is more limited. The possi•  
bilities for taking advantage of attri•  
tion and early retirement have now  
been largely exhausted. Thus, we will  
not be able to avoid redundancies as  
Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen.  
Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.  
Here was a product or mood picture without text or figures.  
It was omitted in the pdffile to improve the usability of the file size.  
Mercedes-Benz employed a total  
of 209,933 people at the end of 1993,  
including 160,175 in Germany. The  
workforce declined in Germany by  
Daimler-Benz InterServices  
(debis) had a total workforce of 8,812  
at the end of 1993, including 7,527  
people in Germany. Primarily through  
acquisitions, the workforce increased  
9,982 from the previous year to  
159,098. Reduced working hours were by 600 from the previous year.  
agreed upon in both divisions, partic•  
ularly the commercial vehicle sector.  
Generally, workforce reductions con•  
formed to socially compatible meas•  
ures such as extensive offerings of  
Included in this net increase is a  
reduction of approximately 150 em•  
ployees at debis Systemhaus due to  
the difficult business situation.  
At Daimler-Benz AG, the execu•  
early retirement and severance agree• tive holding company, a total of 2,984  
ments.  
AEG had a total of 58,921 em•  
ployees at the end of 1993, including  
people were employed at December  
31, 1993, of which 540 were in group  
management functions, 1,274 in group  
4
4,591 in Germany. The workforce de• research functions and 1,170 in ser•  
clined by 4%. The reductions affected  
particularly the Automation, Electro-  
technical Systems and Components,  
and Microelectronics fields of activity.  
At Deutsche Aerospace (DASA)  
vice areas for the corporate units and  
the Mohringen location. The workforce  
declined by 156 employees from the  
previous year.  
8
6,086 people were employed at year-  
Collective Agreements for 1993  
In the old Federal states of Ger•  
end, including 69,373 in Germany. In  
comparison with the previous year,  
the workforce in Germany declined by  
many, wages and salaries rose by 3%  
effective April 1, 1993, as a result of  
the pay agreements concluded for the  
metal-working and electrical indus•  
tries in 1992. Additionally, the con•  
tractually guaranteed special remu•  
neration rose to 60% of a month's pay.  
The reduction in working hours to 36  
hours per week without loss of pay,  
previously agreed to in 1990, also  
went into effect on this date. In the  
new Federal states, the 1991 agree•  
ments on gradual adjustment of wage  
and salary contracts to the level in  
West Germany were changed only af•  
ter a labor dispute. The decisive mate•  
rial change consists in an extension of  
8%. Additionally approximately 50% of  
employees were affected by reduced  
working hours. The continued dra•  
matic sales decline in the Aircraft,  
Space Systems and Defense Systems  
divisions led to the announcement in  
October, 1993 of significant changes  
in structure and employment at the  
DASA group.  
the phases of the time frame. As of De• Private Capital Formation  
cember 1, 1993, pay rates were gradu•  
Assistance in employee stock  
ally raised to 80% of the West level. As ownership programs was provided  
Company Training Activities  
Particularly in difficult economic  
times, the Daimler-Benz group con•  
siders the training of junior personnel  
an important strategic task to protect  
the future of the company.  
At year-end 1993, approximately  
12,800 young people were undergoing  
vocational training in Germany, of  
which 3,200 young men and women  
commenced training in 1993. Over  
100 of the jobs created by the Daimler-  
Benz group, in the new Federal states  
in 1993, exceeded the actual needs  
and is evidence of the company's  
strong sense of social responsibility.  
of July 1, 1994 the ratio will be 87%.  
After a further increment to 94% on  
July 1, 1995, the level in the old Ger•  
man states will be the same for all  
German states by July 1, 1996.  
again in 1993 to the domestic group.  
Daimler-Benz AG, Mercedes-Benz AG,  
and a few companies belonging to  
debis participated in these programs.  
Every entitled employee had the  
opportunity to purchase a share of  
Daimler-Benz AG at a discounted  
price. Approximately 73,000 em•  
ployees, or 41 % of those entitled,  
took advantage of this offer.  
Personnel and Social  
Welfare Expenditure  
Group personnel expenditures  
increased by 6% to DM 33.8 billion.  
In connection with the vigorous cost-  
cutting measures, social benefits were  
curtailed in all corporate units and in  
the holding company.  
Managerial Development  
and Planning  
Managerial development and plan• Training is offered in almost 60 techni•  
The company pensions, a central  
element of social benefits in the  
Daimler-Benz group, remained un•  
affected. Daimler-Benz AG and  
Mercedes-Benz AG paid DM 353 mil•  
lion to approximately 53,200 retirees,  
widows and children in 1993. A total  
of DM 551 million was allocated to  
pension provisions at Daimler-Benz  
AG and Mercedes-Benz AG. AEG dis•  
bursed DM 107 million in 1993 and  
DASA paid DM 113 million. A total  
of DM 1.4 billion were provided for  
company pensions in the group.  
ning is characterized by increasingly  
difficult economic conditions. Execu•  
tives are also affected by the neces•  
sary adjustments in staffing levels.  
The 1993 executive staff review  
reflected a sufficiently large number of  
qualified junior personnel to meet the  
expected future need of managerial  
staff. We are assisting our managerial  
staff through specially developed  
training programs to improve their in•  
novative skills and acquiring greater  
general management competence with  
a more international profile.  
cal trades and 10 different business  
professions. This training is supple•  
mented by 15 special programs for  
high school graduates at professional  
academies.  
All corporate units offer advanced  
training in comprehensive programs  
consistent with the different fields of  
activity. The focus of training for se•  
nior managerial staff in 1993 was the  
structural change in the group and its  
markets.  
Expenditures for basic vocational  
and advanced training was approx•  
imately DM 800 million in 1993.  
The expansion of networks for  
knowledge transfer, integration and  
communication within the group was  
assisted by the '93 Daimler-Benz Con•  
gress in Berlin: in numerous working  
groups, approximately 2,000 senior  
managers from domestic and foreign  
companies of the group discussed  
issues of internationalization, market  
orientation, innovative strength, com•  
petitiveness and responsibility toward  
society.  
The 1993IAAF World Championships in Athletics in Stuttgart drew nearly half a million  
spectators to the Gottlieb-Daimler Stadium. More than four billion people around the world  
followed the competitions on television. Daimler-Benz and Mercedes-Benz were active  
sponsors of this extremely successful event.  
Preventive Health Care  
Our sponsoring policy has two pri•  
mary goals. First, it should yield tan•  
gible benefits for society by concentrat•  
ing on projects which would not have  
been possible, or not at the same high  
level, without the support of Daimler-  
Benz. Second, by coordinating spon•  
sorship goals with company goals,  
positive effects should result for the  
company in the market, as well as  
specific benefits for our employees.  
The primary focus of sponsorship  
policy within Daimler-Benz AG is our  
international drive to promote the ad•  
vancement of young people. In addi•  
tion to contributing to better inter•  
national understanding by bringing  
together young people from different  
nations and cultures as well as to im•  
prove the image of Germany abroad,  
we are also securing the development  
of highly qualified, internationally ori•  
ented management personnel for the  
future. The program "Award of Excel•  
lence" in cooperation with the Goethe  
Institute provides an opportunity for  
selected students from the United  
States and Canada to live for several  
weeks with German host families -  
and Occupational Safety  
Medical care for our employees is  
traditionally an essential part of our  
personnel and social policy. In the  
German group companies, approx•  
imately 230 employees are in the  
medical care service to provide health  
care to their peers.  
Approximately 200 full-time  
safety experts ensured on-the-job  
safety. The success of their work is  
reflected in the further reduction in  
accidents in all corporate units.  
Thanks to Our Workforce  
We would like to express our grat•  
itude to all our employees for their  
commitment and hard work in a year  
which was characterized by a very dif•  
ficult economic situation and painful  
steps to optimize costs. We also ex•  
tend our appreciation to the represen•  
tatives of the labor councils and man•  
agerial committees at all levels of our  
group.  
The Company's Role in Society -  
employees of our company - allowing  
them to become acquainted with our  
country and our company. The re•  
sponse to this program within the  
company and the participants has  
been so positive  
Public Relations' Promoted Activities  
Daimler-Benz sponsors a wide range of projects in social, cultural  
and ecological areas as well as sports. In addition to the positive  
benefits to society, our activities also achieve positive effects for  
the company. Particularly important are the international programs  
we have designed to promote the advancement of young people.  
The same strong sense of respon•  
sibility which we feel toward our  
customers also extends to our share•  
holders and to the general public.  
This sense of responsibility includes  
our permanent readiness to engage in  
critical exchanges of ideas with people  
outside, and inside the company. This  
dialogue and cooperation with various  
groups is assisted by a wide range of  
sponsoring projects in social, cultural  
and ecological areas as well as in  
sports.  
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that we plan to expand it in the com•  
ing years. In the future, we will also  
invite young people from other coun•  
tries and regions in which we have  
growing business interests to visit  
In the sponsoring of cultural pro•  
grams and sports, promoting a new  
generation plays an important role.  
This is also true of our support for  
young artists in which we offer spon•  
Germany for several months as guests soring through various methods.  
of the Daimler-Benz group.  
The Daimler-Benz Junior Cup, an  
Planned activities during 1994 for international youth soccer tourna•  
young Russian economists have been  
set at several locations within the  
group. These activities will give them  
ment, held annually in Sindelfingen, in  
which employees of the Daimler-Benz  
group are among the participants, not  
a comprehensive insight into the busi• only contributes to communication  
ness practices of German industrial  
corporations as well as to build a net•  
work of links with the future decision•  
makers in Russia.  
among young people across Europe,  
but also provides the SOS-Kinderdorf  
in Sarajevo with desperately needed  
financial support.  
Complementing this program are  
a number of specific activities at for•  
eign locations, such as in the NAFTA  
region. There, we are offering unem•  
ployed young people in Mexico  
positions as trainees at local group  
subsidiaries.  
The youth projects, which the  
Group is undertaking, in the new Ger•  
man states are especially timely. Dur•  
ing 1993 Daimler-Benz AG held a con•  
ference in Hoyerswerda on the subject  
"Youth and Violence". The conference  
included the financing of work promo•  
tion programs to benefit unemployed  
youth in cooperation with the Freuden-  
berg Foundation and the German  
Foundation for Children and Youth.  
Similar goals are being pursued by the  
Youth Projects in Mannheim, which  
has a long tradition of assisting young  
people.  
Finance and M aterials  
national and international markets and  
pass these funds to the operating com•  
panies. This method enables the financ•  
ing costs to be lower than through  
direct refinancing by the operating  
companies in the local markets  
We have merged group-wide functions of the Finance and Materials  
division at the headquarters in Stuttgart-Mohringen. Important  
events in 1993, among other things, were the obtaining of a long-  
term rating by Standard & Poor's and Moody's Investors Service,  
the preparation and implementation of the New York Stock  
Exchange listing of the Daimler-Benz shares and the activities in  
connection with the Purchasing Drive in the New Federal States.  
Due to the continuing growth of  
the financial services business,  
we again used the various interna•  
tional capital markets in connection  
with the central procurement of funds  
for financing. We focused on borrow•  
ing under our Euro medium-term note  
program, and were able to support  
the needs of our leasing and sales  
financing companies very flexibly.  
Due to the scope of this borrowing we  
limited ourselves to a few activities  
involving the standard Eurocurrency  
loans. We performed a securitization  
of sales financing receivables in the  
USA for the first time, with the goal of  
extending our investor base and diver•  
Group Treasury  
During 1993 we continued to  
develop the concept and technical  
aspects of our central cash manage•  
ment and included the European  
group companies in the cash concen•  
tration process.  
In the area of cash management,  
flexibility and efficiency were further  
improved through increased use of  
commercial paper programs, espe•  
cially in Germany and the USA.  
Through active portfolio management,  
we invested long-term funds primarily sifying our financial instruments.  
in fixed interest rate instruments of  
first-class issuers and, to a smaller  
extent, in investments in shares of  
other companies.  
As part of our Treasury activities  
we also make use of derivative money  
and capital market instruments to  
limit the group's financial risk and  
improve financial results.  
As in the past, the task of foreign  
exchange management consisted of  
ascertaining and limiting, by foreign  
exchange hedging methods, the cur•  
rency risks of the operative sectors,  
particularly with regard to USD and  
JPY and also for selected European  
currencies. We will continue in the  
future to be guided in our strategy by  
continually updating currency rate ex•  
pectations and will employ the finan•  
cial instruments individually depend•  
ing on the currency and business field.  
The financing needs of the group  
are essentially handled by Daimler-  
Benz AG and its network of regional  
holding and finance companies. The  
networks, in their function as financial  
hubs, procure external funds on the  
The handling of financial transac•  
tions and the use of the financial trad•  
ing instruments in connection with  
central cash and foreign exchange  
We view the maintenance and im• Sales and Project Financing  
provement of the financial flexibility of  
the group as an important goal. Our  
mobility shows itself, for example, ap•  
Supporting worldwide sales of  
group products increasingly requires  
specific product and customer related  
management and the central refinanc• propriate to the business needs, in the financing solutions in addition to the  
ing tasks is governed by financial trad• fact that gross liquid funds are avail•  
offering of standardized financing pro•  
grams. We need innovative financing  
and hedging facilities for projects of  
units operating in the infrastructure  
sector.  
ing guidelines and thus subject to  
strict regulation. Accordingly, we  
employ electronic systems with  
defined financial control parameters  
able within the group (at year-end  
1993 over DM 10 billion). Addi•  
tionally, we finance less than two  
thirds of our financial services exter•  
which take functional distinctions into nally and the rest from group funds.  
account. An external refinancing level as high  
A hierarchically structured report• as 90% is customary in the industry.  
In traditional export financing we  
made use of the opportunities pro•  
vided by the existing financing and  
hedging instruments. We also have fi•  
nancings in which these methods are  
not utilized. For construction and as•  
sembly projects in Eastern Europe and  
the Far East, tailored financing solu•  
tions were developed.  
ing system, which is steadily improved  
upon, shows us risk areas and poten•  
tials very early on and provides us  
with up-to-date information on which  
to base decisions. Since we make  
extensive use of electronic data pro•  
cessing systems in our cooperation  
With a view to financial security,  
we always supply our foreign subsid•  
iaries with enough equity so that they  
can refinance themselves on a stand•  
alone basis regardless of the oppor•  
tunities for fund procurement through  
our centrally controlled regional hold•  
The further recovery of the econ•  
omies of the countries of Latin Amer•  
with external associates, we give great ing and finance companies.  
importance to data security.  
During 1993, there were larger re• ica, Central Europe and in part, the  
quirements for funds, above all in the  
domestic areas of the group. These  
Far East, contrasted with a partial de•  
terioration of political stability and the  
Financial Planning and Control  
To minimize the cost of capital in  
were covered notably by freeing DM 3 economic climate in several countries  
financing group activities, we optimize billion in funds from inventories and  
of Africa, Eastern Europe and the CIS.  
Restrictive policies continued for the  
approval of credit risk insurance, and  
resistance by international banks were  
met within these regions. This  
the allocation of the existing funds in  
the group, along with the distribution  
channels through which the necessary  
capital from outside and inside the  
group, is provided to the users within  
the group.  
by generally raising the efficiency of  
working capital management.  
In the 1993 financial year,  
Moody's Investors Service and the  
Standard & Poor's ratings group for  
the first time issued long-term ratings  
to bonds and issues under the Euro  
medium-term note program guaran•  
teed by Daimler-Benz. Both agencies  
rated the good credit standing of  
Daimler-Benz with Aa3 and AA, and  
particularly stressed the group's favor•  
able financial profile. These strong rat•  
ings improve possibilities for borrow•  
ing on the international debt markets.  
required greater effort to structure  
financing solutions.  
Programs of public institutions to  
aid the financing of delivery and in•  
vestment projects are important not  
only for the newly industrializing and  
developing nations of Africa, Asia and  
Latin America, but increasingly also  
for the countries of Eastern Europe  
and the CIS. There are also oppor•  
tunities in connection with technical  
For private shareholders, we organ• Investments in Related Companies  
ized an Investor Relations Forum in  
the Stuttgart Liederhalle auditorium in  
June, 1993, together with DG Capital  
Mergers & Acquisitions  
It was again our policy in 1993 to  
adjust or round out the core business  
Management. We introduced our com• segments of the group through the for•  
pany to over 1,000 interested guests,  
giving them a survey of the activities  
of the Daimler-Benz group. In view of  
the exceedingly favorable response,  
mation of joint ventures, divestitures,  
and selective acquisitions, and in this  
way to secure our competitive posi•  
tion. As specific examples, a transac•  
tion structure was developed; busi•  
nesses were appraised and analyses of  
companies performed (due diligence)  
in connection with purchases; and  
concepts for investments in related  
companies and management concepts  
assistance and rehabilitation programs we will stage further events in the fu•  
which are used for the financing of  
products of our group.  
It will continue to be a central  
task of trade and project financing to  
minimize financing risks in order to  
ture specifically addressed to private  
investors.  
In addition, we take the informa•  
tion requirements of institutional in•  
vestors and financial analysts into ac•  
support product sales and, at the same count through round-table discussions were elaborated.  
time, to maintain the group's latitude  
for financing.  
and company presentations. The in•  
creasing demand for round-table dis•  
cussions, which we hold at our head•  
quarters in Stuttgart-Mohringen, indi•  
cates that this form of communication  
with the capital market has become  
indispensable.  
Beyond the consulting-related du•  
ties we exercised the asset protection  
function for the group by evaluating  
the group's subsidiaries and affiliates  
as to performance and, where re•  
Investor Relations Activities  
As part of our investor relations  
activities we provide comprehensive  
information on our enterprise and its  
development, to financial analysts and  
institutional investors, as well as to  
quired, developing methods for im•  
provement together with the corporate  
We hold company presentations in units. These ranged from optimization  
Germany and in major foreign finance  
of capital employment to consideration  
of joint ventures and divestitures.  
In the framework of subsidiary  
our private shareholders and potential centers, in close cooperation with  
investors, both domestic and foreign.  
We address all our shareholders and  
the general public through our annual  
and interim reports.  
renowned commercial and investment  
banks. The high point of these activ•  
ities was an extended roadshow in the sisted with and exercised Supervisory  
and affiliate administration, we as•  
USA, where we conducted presenta•  
tions and individual talks with inves•  
tors in Los Angeles, San Francisco,  
Portland, Chicago, Boston and New  
York in preparation for our New York  
stock listing. To give US investors and  
financial analysts direct and timely  
access to company information, we es•  
tablished an Investor Relations Office  
in New York parallel to introducing  
the stock there.  
Board duties for the group companies,  
followed and assessed ongoing pro•  
jects, and drafted decisions for the  
internal bodies.  
Purchasing Drive in the  
New Federal States Supports  
Upswing in the East  
Information concerning potential  
suppliers, such as the range of  
products offered, financial data and  
The "Purchasing Drive in the New previous talks with group companies  
Federal States" initiated in 1992 by  
West German enterprises can look  
back on encouraging results in the  
are collected by the Materials sector of  
Daimler-Benz AG in an information  
data base to which all corporate units  
first full year in which it was in effect. have access.  
Important contributions were also  
made by the companies of the  
Daimler-Benz group. Purchases from  
To assist the purchasing sectors, a  
coordination office was opened in Ber•  
lin on July 1, 1993. It serves the corpo•  
the new Federal states were increased rate units as an information and con•  
to over DM 800 million (1992: DM 600 tact point, and is the contact for poten•  
million). Despite the continued diffi•  
tial suppliers and associations. The  
cult economic situation we expect that various parties are already making  
the purchasing goal of DM 1 billion in  
the new Federal states expected for  
the year 1995 can be achieved, if not  
exceeded.  
very active use of this liaison office.  
Global Sourcing Activities  
Our purchases from abroad have  
increased due to additional global  
sourcing activities. To further improve  
our cost structures, we are striving to  
raise the foreign share of purchasing  
We want to assure as efficient a  
procedure as possible for making con•  
tact with and selecting potential sup•  
pliers from Eastern Germany. For this  
purpose we have created a special pro• in Germany to 25% in the medium  
ject organization "Purchasing Drive in  
the New Federal States in the Daimler-  
Benz Group": with the Daimler-Benz  
holding company exercising overall  
coordination. Project officers have  
term.  
Eight corporate offices have been  
established in the important and  
productive markets in Europe, North  
America, Asia and Australia to coordi•  
been appointed in every corporate unit nate purchasing. They support our do•  
who steer the activities of their partic• mestic purchasing departments with  
ular company.  
information on potential new suppliers  
and about market trends and poten•  
tials in the respective countries and  
make purchases locally for the individ•  
ual group companies.  
To achieve optimum communica•  
tion between potential suppliers and  
the companies of the Daimler-Benz  
group and to effectively support the  
existing links, "sponsorships" were in•  
Additionally, up-to-date informa•  
troduced in the fall of 1993. Ten expe• tion on the international markets is  
rienced managers from the group are  
each responsible for ten companies.  
available to purchasers through a  
foreign supplier information system  
installed worldwide.  
On October 5, 1993, Daimler-Benz AG was the first German company to be listed on the New  
York Stock Exchange. The successful negotiations with the US Securities and Exchange  
Commission (SEC), have opened up a new epoch for us in capital procurement and financial  
disclosure.  
The Daimler-Benz Share  
The price of the Daimler-Benz share rose by 57% in 1 993, to  
DM 844, primarily due to the good atmosphere on the German  
stock markets as well as the very favorable reception regarding  
the introduction of our shares on the New York Stock Exchange.  
To increase the number of our shareholders in the USA, Deutsche  
Bank reduced its stake in Daimler-Benz AG to slightly more than  
24% and placed just under 4% of our capital stock on the American  
market. Following the merger of Mercedes Aktiengesellschaft  
Holding with Daimler-Benz AG, we will have more flexibility in using  
the international capital markets.  
During the beginning of the sec•  
ond half of the year, the German stock  
index DAX increased at an accelerated  
pace, climbing to a new record high of  
2,267 points by the end of the year.  
At DM 844, the Daimler-Benz  
share attained a year-end price which  
it had last reached in early August,  
1990. The 57% increase in 1993 was  
higher than the average increase for  
the 30 enterprises included in the DAX  
(47%). In the first months of 1994, the  
German stock market entered a phase  
of consolidation which coincided with  
the revision of the optimistic expecta•  
tions in regard to the economy and  
profits, not least because of fears that  
interest rates would rise again. The  
Daimler-Benz share price fell, through  
the end of February, by 4% to DM  
8
08.3, while the DAX average declined  
by 7%.  
Once again in 1993, our shares  
were among the most heavily traded  
Stock Exchange Trend  
In 1993 almost all major stock  
exchanges reached new highs. The  
boom in the German stock market was securities on German stock exchanges.  
nourished by declining interest rates  
and repeated rumors of additional in•  
terest rate cuts. Other factors were the  
anticipation of medium-term profits  
now that numerous enterprises have  
instituted cost-cutting measures and  
that the new law to safeguard loca-  
tional advantages had been passed.  
A total of 309 million shares, a third  
more than the previous year, were  
traded. This volume, with a market  
value of DM 204 billion, represented  
11 % of the total trade in domestic  
stocks. On the German Futures Ex•  
change, Daimler-Benz options also  
ranked among the most actively  
traded securities, with 1.6 million  
contracts traded.  
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Daimler-Benz on  
MAH shares will be exchanged for  
Daimler-Benz stock at a ratio of 1 for  
1, now that this has been noted in the  
register of corporations in Frankfurt/  
Main and Stuttgart. MAH held a  
470,000 shareholders, Daimler-Benz is  
one of Germany's largest public corpo•  
rations.  
Foreign Stock Exchanges  
In October, 1993, we listed our  
shares on the New York Stock  
Exchange. Daimler-Benz is the first  
German company to have gained  
direct access to the largest and most  
Dividend Reduced  
blocking minority of 25% of the  
Daimler-Benz capital stock. Following  
For the financial year 1993, a divi•  
dend of DM 8 (1992: DM 13) for each  
eligible share of DM 50 par value will  
important capital market in the world. the merger, Daimler-Benz will be able  
The American Depositary Shares  
to make more flexible use of the inter• be proposed at the Annual General  
(
ADS) traded there are denominated at national capital markets. In the future  
Meeting taking place on May 18,  
1994. For shareholders subject to  
income taxes in Germany, the gross  
dividend amounts to DM 11.43.  
a tenth of the par value of a Daimler-  
Benz share. The opening quotation  
was 47 1/8 dollars; the quotation on  
December 30, 1993, was 48 5/8  
dollars.  
The Daimler-Benz share is now  
listed on eight foreign stock  
exchanges:  
it will be possible to increase capital  
stock depending on the market situa•  
tion and to issue convertible bonds or  
options. In addition, our shares will be•  
come accessible to a broader range of  
investors.  
The trading volume of our shares  
on foreign stock exchanges in 1993  
increased by 44% to 24 million  
shares. Trading in London was partic•  
ularly active.  
To further internationalize our  
financing activities and to strengthen  
our global presence, we intend to be  
At the beginning of February,  
1994, Deutsche Bank placed part of its  
holding, about 4% of our capital stock,  
on the American market. Deutsche  
Bank's interest in our company  
Good Yield Opportunities  
A long-term investment in  
Daimler-Benz shares offers good yield  
opportunities, although a share price  
decline may produce a negative re•  
turn. Investments made in currencies  
other than the D-Mark entail further  
opportunities and risks due to fluctua•  
tions in currency exchange rates.  
A twelve-year investment in Daimler-  
Benz stock reflects an average return  
the first German company to introduce thereby declined to 24.4%. Our share•  
our stock in Singapore in May, 1994.  
As soon as the necessary conditions  
are met, we also plan to go to the  
Shanghai stock exchange, where no  
holder base in the USA has thus been  
substantially broadened.  
The Government of Kuwait, with  
approximately 14%, is the second  
foreign companies are presently listed. largest shareholder in Daimler-Benz  
We want to underscore the growing  
significance of East Asia for our  
product range.  
after Deutsche Bank. Stella Automobil- of 13.8% per annum; an investment of  
Beteiligungsgesellschaft mbH will  
retain a share of 12.6%. When the  
merger of Mercedes Aktiengesell•  
schaft Holding with Daimler-Benz AG  
takes effect, almost half of our capital  
stock will be widely held. With a mar•  
ket value of DM 37.7 billion (at the  
end of February, 1994) and over  
only three years reflects a return of  
16.1%. In this calculation we have  
assumed that the proceeds from rights  
issues and cash dividends (excluding  
tax credits) were reinvested in  
Daimler-Benz stocks and that the  
investor has not purchased any  
additional amounts.  
Shares more widely held  
At the end of December, 1993,  
the Extraordinary General Meeting of  
Daimler-Benz AG and the Annual  
General Meeting of Mercedes  
Aktiengesellschaft Holding (MAH)  
resolved to merge the two companies.  
Discussion and Analysis of the Financial Situation  
The 1 993 consolidated group net income is DM 0.6 billion  
vious year because of the first-time  
consolidation of Fokker; accordingly,  
the latter's share in the total revenue  
increased from 48.7% to 51.3%.  
(
1992: DM 1.5 billion); it was supported by changes in valuation in  
which we adjusted certain accounting principles to the U.S. ac•  
counting principles. Using U.S. accounting principles, results for  
Despite the reduction in employment,  
personnel expenses continued to rise,  
as a result of the inclusion of Fokker  
and of the high costs of structural per•  
sonnel strategies, so that this compo•  
nent now represents 34.0% (1992:  
1
993 amounted to a loss of DM 1.8 billion (1992: a profit of  
DM 1.4 billion). Due to the sharp decline in business operations,  
and extensive restructuring costs incurred of DM 3.5 billion,  
the net operating result was a loss of DM 3.3 billion DM  
(
1992: a profit of DM 2.0 billion).  
31.7%) of total revenue. Since the pre•  
ceding years' high level of investment  
in property, plant and equipment and  
Valuation in Consolidated  
ance sheet, have generated a one-time leased equipment continued during  
Financial Statements Adjusted to  
U.S. Accounting Principles  
income before tax of DM 2.6 billion in  
the German consolidated financial  
statements. This amount is classified  
as extraordinary income. The balance  
of the differences are from rules and  
regulations regarding obligatory ac•  
counting and valuation procedures.  
Our annual report includes a  
1993, the depreciation increased by  
13.7%, to DM 8.1 billion.  
We began to conform our balance  
sheet accounting and valuation  
methods to international conventions  
with the 1989 consolidated financial  
statements, in order to simplify com•  
parison with other companies as well  
as to improve our method of reporting. reconciliation of the net income  
We were the first German company to  
list its stock on the New York Stock  
Exchange, and therefore reconciled  
and stockholders' equity determined  
according to the principles of the Ger•  
man "Handelsgesetzbuch" (Commer•  
net income and stockholders' equity to cial Code) to those amounts reported  
generally accepted accounting princi•  
ples in the U.S. (U.S. GAAP). It became  
apparent that there were still substan•  
tial differences between our account•  
ing principles and the U.S. accounting  
principles, which have a decisive  
under U.S. GAAP.  
The interest expense for our leas•  
ing and sales financing companies, at  
DM 342 million, was significantly  
lower than that of the preceding year.  
Interest income of the leasing busi•  
ness is included in the lease payments  
Consolidated Net Income of  
DM 615 Million Reported  
In addition to the changes in ac•  
counting principles and valuation  
influence on financial reporting.  
methods, the 1993 consolidated finan• and therefore included in revenues.  
cial statements include special factors When the interest expense for financ•  
In the 1993 consolidated financial  
statements, we have therefore adapted and the first-time inclusion of the Fok• ing leasing and sales are excluded, the  
our methods of accounting and valua•  
tion as closely as possible to U.S.  
GAAP. These measures, which at the  
same time achieve substantial align•  
ment between the German commercial basis, i.e. taking Fokker's 1992 sales  
balance sheet and the German tax bal• into account, the decrease was 3.8%.  
As a result of the reduction in inven•  
ker group. As a result of the recession• net interest income for the group is  
ary weakness in the most important DM 0.8 billion (1992: DM 1.0 billion).  
markets, sales revenue declined by 0.8% As in previous years we have reduced  
to DM 97.7 billion. On a comparable  
interest income by the inflationary  
effects, from highly inflationary  
countries.  
tory at Mercedes-Benz (offset, how•  
ever, by inventory increases at DASA  
and AEG), total revenue declined more  
sharply than sales revenue, down  
DM 1.4 billion to DM 99.3 billion. Costs  
of materials exceeded those of the pre•  
The results from ordinary busi•  
ness activities declined significantly,  
from DM 2.5 billion in 1992 to a loss  
of DM 1.1 billion in 1993. The 1993  
net income of DM 615 million (1992:  
DM 1,451 million) was achieved only  
because of lower taxes on earnings  
The disappointing trend of busi•  
ness in the year 1993 is more clearly  
evident in the operating results than  
in the reported net income.  
Following a profit of DM 2.0  
billion in 1992, this (for an internal  
calculation) important figure took a  
Balance Sheet Influenced  
by Financial Service Business  
Even greater than the effect on the  
income statement, is the effect of the  
continued strong growth of leasing  
and sales financing on the consoli•  
dated balance sheet. Our leasing con•  
and other taxes and certain accounting significant turn to a loss of DM 3.3 bil• tracts are primarily operating type  
changes which had a considerable ef•  
fect on the 1993 consolidated net in•  
come. These changes in accounting  
principles influenced almost all areas  
of operations and the net income of  
Daimler-Benz AG.  
lion in 1993. (see page 69)  
leases. Leased equipment is valued at  
its acquisition or manufacturing cost  
less accumulated depreciation. It is  
listed separately as part of the  
Results of Operations  
Allocation among the divisions:  
non-current assets.  
The financing of sales is a install•  
ment receivable, which increases the  
balance sheet due to the recording of  
such receivables and liabilities due to  
the financing of such receivables. Ad•  
ditionally, prepaid customer operating  
lease payments are reported as a lia•  
bility included in deferred income.  
We utilize the financial services  
business, within the Daimler-Benz  
In addition to the one-time profit  
of DM 2.6 billion due to the change in  
certain accounting principles which  
we posted as extraordinary income,  
we had a gain of DM 1.7 billion from  
sales of securities. There were also  
income of DM 1.0 billion from tax  
rebates and DM 237 million from the  
recapture of over-funded assets of the  
Daimler-Benz external pension funds  
to the provider companies Daimler-  
Benz AG and Mercedes-Benz AG,  
which thus was a tax free transaction.  
While the decline of business in  
the automobile and commercial vehi•  
cle industry had a negative effect on  
the operating profit of Mercedes-Benz, group, as a flexible instrument of our  
the restructuring expenses, amounting world-wide sales strategy. The effects  
to approximately DM 1.7 billion, also  
played a decisive role in reducing  
of this business on the consolidated  
balance sheet are shown in the follow•  
ing table. It is assumed that the funds  
which are utilized by the financial  
service business are available for the  
payment of liabilities.  
In contrast to these revenues were income.  
expenses of approximately DM 3.5 bil•  
lion connected to the restructuring of  
technical capacities and the extensive  
reduction in personnel. There were  
also additional provisions resulting  
from write-downs of the portfolio of  
investments in affiliated and related  
companies and from the first-time  
inclusion of the Fokker group in the  
Daimler-Benz consolidated financial  
statements.  
The operating loss at AEG  
includes restructuring expenses of  
DM 607 million.  
The results of DASA were im•  
paired by the decline in demand in the  
areas of defense technology and space  
systems and by the first-time inclusion  
of Fokker. In addition there were pro•  
visions for future restructuring ex•  
penses amounting to DM 1.1 billion.  
The higher operating profit of  
debis is a result of lower net interest  
costs for the financing of leasing and  
sales, as well as improvements in the  
earnings of certain foreign leasing  
companies.  
The rent expense on operating  
leases for 1993 was DM 935 million.  
Future minimum rental payments  
under these operating leases as of  
December 31, 1993 are (in millions  
of DM) as follows:  
Future rental income, from con•  
tractual agreements totalling  
DM 10,307 million, are distributed  
over the future years as follows  
(in millions of DM):  
Balance Sheet Total Increase  
for the Group  
The consolidated balance sheet to•  
tal increased again in 1993 as a result  
of the first-time inclusion of Fokker  
and the further expansion of the leas•  
ing and sales financing business by  
Inventories, which increased only  
slightly in comparison to the previous  
year, were financed by approximately  
33% through customer down pay•  
ments. Despite the inclusion of Fok•  
ker, "net inventories", after customer  
down payments, were reduced from  
DM 17.6 billion to DM 16.9 billion.  
1993 net income, the amortization  
of good-will relating from the acqui•  
sition of Fokker and the reduction in  
minority interest of shareholdings  
were the primary reason for this de•  
crease. The percentage of stock•  
5.5% to DM 90.9 billion. Including the  
leased equipment, non-current assets  
increased by 5.1 % to DM 35.4 billion.  
If the leased equipment is excluded,  
the non-current assets declined by  
holders' equity to total liabilities de•  
clined from 22.2% to 19.5%. If we ex•  
DM 0.4 billion, to DM 23.5 billion. The The release of funds from inventories, clude the financial service business,  
net increase of DM 4.7 billion in prop• together with more effective manage•  
erty, plant and equipment, including  
ment of working capital, helped meet  
the acquisition of DM 0.8 billion of the the need for additional financial as•  
Fokker group which is consolidated  
sets, especially in Germany. Liquid  
for the first time, is reduced by DM 5.2 funds had a net increase from DM 9.8  
which is dependent on business vol•  
ume and is largely financed from out•  
side sources, the percentage of stock•  
holders' equity to total liabilities is  
26.0% (1992: 27.9%), the coverage of  
billion in depreciation. The leased  
equipment continues to have above-  
average growth, increasing by 21.5%  
to DM 11.9 billion. Excluding the in•  
ventory of lease vehicles, property,  
plant and equipment would be re•  
duced from 27.7% to 25.8% of total  
billion to DM 10.5 billion. The percent• non-current assets (excluding leased  
age of liquid funds to the total assets equipment) by stockholders' equity  
is 11.5%, which is consistent with that decreased from 81.1% to 77.5%.  
of the prior year.  
On the liabilities side, stock•  
Liabilities from the financing of  
leasing and sales increased by 24.5%,  
holders' equity, excluding the amount to DM 13.7 billion while allowances  
intended for dividend distribution, was for losses increased by only 3.4%, to  
assets. Receivables from the financing reduced by DM 1.3 billion to DM 17.8  
DM 35.9 billion. The income from the  
changes in accounting principles was  
reduced by the first-time inclusion of  
of sales increased by 42.2%, to  
DM 8.8 billion.  
billion. With only a small amount  
- DM 0.2 billion - retained from  
the Fokker group and the established  
provisions for the reduction in work•  
Stockholders' equity and long and  
medium-term provisions fully cover  
Below we have reproduced the  
segment reporting, based on German  
force and the restructuring of capacity. both the non-current assets (excluding accounting principles, as it appears in  
Provisions amounted to 39.5% (1992:  
0.3%) of the balance-sheet total.  
leased equipment) and net inventories. the Form 20-F report, which we file  
with the U.S. Securities and Exchange  
4
Commission.  
Statement of Financial Accounting  
Standards No. 95  
and its large amount of cash (DM 2.0  
billion) at the time of its initial consol•  
idation. Since the surplus in financial  
assets from the industrial sector was  
not sufficient to fully cover the finan•  
cial needs of the rapidly expanding  
leasing and sales financing business,  
we required additional debt of DM 1.3  
billion in 1993 (1992: DM 3.7 billion).  
We are also anticipating a high  
Information on Derivative Financing  
Instruments in Accordance with  
US Standards  
"
Statements of Cash Flows"  
(SFAS 95)  
Daimler-Benz uses derivative fi•  
nancing instruments in order to hedge  
currency and interest rate exposure  
for normal business operations.  
We work only with banks which  
have strong long-term ratings.  
The financial instruments are  
The cash flow statement of the  
Daimler-Benz group included in the  
992 annual report, has been revised  
1
to completely conform to the U.S. Ac•  
counting Standard, SFAS No. 95. Ac•  
cordingly, the effects of foreign curren•  
cies are eliminated, the additions to  
non-current assets are adjusted for  
significant changes in the consolida•  
tion group, changes in stockholders'  
level of capital expenditures in the  
Daimler-Benz group in the next few  
written almost exclusively in the cur•  
rencies of the large industrial coun•  
years. We are exploring the utilization tries. At December 31, 1993, the vol•  
of a variety of financing models for the ume of positions in foreign currencies  
equity allocated, and the declaration of leasing and sales financing business,  
was DM 30.9 billion (1992:  
cash is based only on instruments of  
payment, rather than on total liquid  
assets. A reconciliation to the liquid  
assets is included in this report.  
In comparison to the previous  
year, the cash flow from operating ac•  
tivities increased by 86% to DM 9.9  
billion. This increase is primarily due  
to the significant reduction in inven•  
tory assets, after adjustment for  
changes in the consolidation group.  
Cash flow from investing activities, of  
DM 10.5 billion, was also substantially as a "Form 20-F" with the Securities  
higher than in 1992 (DM 7.5 billion).  
The primary reason for this increase  
was the first-time consolidation of  
Deutsche-Aerospace Airbus GmbH,  
which continues to expand. Addi•  
tionally, we would like to support the  
anticipated growth of the companies  
by adding equity in the future.  
DM 19.1 billion), and that of interest  
rate contracts was DM 13.1 billion  
(1992: DM 8.6 billion). These gross  
amounts represent the base values of  
all buying and selling contracts, as  
they are required to be disclosed in ac•  
Additional Information in  
Accordance with the "U.S. Generally cordance with Statement of Financial  
Accepted Accounting Principles"  
(U.S. GAAP)  
Accounting Standard No. 105.  
With the introduction of Daimler-  
Benz stock on the New York Stock Ex•  
change, we are filing an annual report  
Differences in Accruals as a Result  
of the Change in the Treatment of  
Provisions, and Valuation Methods.  
U.S. accounting principles do not  
allow the formation of the extensive  
loss provisions as permitted by Ger•  
man law. The excess German loss pro•  
visions have to be dissolved, which  
and Exchange Commission (SEC).  
Much of the content of this filing is  
information taken from our annual  
report; however, additional data and  
financial information is provided deter• has an effect on the net income as well  
mined on the basis of U.S. accounting  
principles. In the following sections  
we have set forth what we consider to  
be the most important information  
from the "Form 20-F." Since there are  
substantial differences, especially in  
the annual net income and stock•  
as stockholders' equity. According to  
U.S. GAAP, the stockholders' equity  
holders' equity, the reconciliations are  
required to convert certain financial  
data from the German consolidated fi•  
nancial statement to the values calcu•  
lated by using U.S. generally accepted  
accounting principles (see page 73).  
increased by DM 5.8 billion during  
993 as a result of the dissolution of  
certain loss provisions which also  
Goodwill and Acquisition  
Currency Translation and Financial  
Instruments  
1
of Investments in Businesses  
Under German accounting regula•  
changed the inventory and receivables tions, goodwill can be allocated to  
stockholders' equity, or capitalized  
and amortized generally over the ex•  
American investors that such retained pected useful life, which in Germany  
earnings are not available for distribu• ranges between 5 to 15 years. Under  
Unrealized exchange profits and  
losses on financial instruments are  
treated differently in the two account•  
ing systems. Under German law, ac•  
cording to the imparity principle, only  
unrealized losses are to be recorded,  
value. We use the term "Appropriated  
Retained Earnings" to disclose to the  
tion as dividends. This term also  
establishes a bridge between the two  
different accounting cultures.  
U.S. GAAP, the difference between ac• whereas under U.S. GAAP unrealized  
quisition costs and market value must profits as well as losses must be  
be capitalized and amortized over a  
period not exceeding 40 years.  
recorded.  
Long-Term Manufacturing  
Other Differences in Valuation  
Additional differences between  
German and American accounting  
methods may occur with respect to  
inventories, minority interests and  
leasing activities.  
Customer deposits and manufac•  
turing costs are reported under Ger•  
man law in accordance with the com•  
pleted contract method, whereas U.S.  
principles generally require that the  
percentage of completion method be  
used. The majority of contracts within  
the group require partial prepayment  
Disposal of Investments  
in Businesses  
Under German accounting princi•  
ples, sales of subsidiaries and share•  
holdings in businesses must be  
allocated to the period in which the  
contract is signed. According to  
U.S. GAAP, the gain or loss on invest•  
Deferred Taxes  
Under German accounting regula•  
tions, deferred tax assets are estab•  
lished only for the elimination pro•  
cesses in consolidation. Under U.S. ac•  
counting principles deferred tax assets  
can also be recorded for valuation  
as well as partial recognition of profits ment cannot be recognized until after  
based upon payments received. Con•  
tracts of this nature are also custom•  
ary in the USA, and are recognized  
under its accounting regulations. The  
resulting differences therefore are  
not material.  
the actual monetary exchange of the  
investment.  
Pension Provisions  
According to U.S. accounting prin• adjustments and existing tax loss  
ciples, the determination of provisions carry-forwards.  
for old-age pensions requires, among  
other things, a determination for antic•  
ipated increases in wages and salaries.  
The calculation is not based on the dis•  
count rate of 6% for unaccrued inter•  
est, which is applicable under German  
tax law but incorporates the respective  
actual interest rates. Another differ•  
ence is a result of the requirement  
that health care costs for retirees be  
actuarily calculated and accrued for in  
the USA.  
Notes to the Consolidated Financial Statements  
Summary of Significant Accounting Policies  
The consolidated financial state•  
ments have been prepared in accord•  
ance with German generally accepted  
accounting principles ("German  
Provisions for Employee Benefits  
and Social Costs  
The obligations for anniversary  
bonuses, previously calculated  
Accounting and Valuation  
Intangible assets are valued at ac•  
quisition cost and are amortized on a  
straight-line basis over the respective  
GAAP"). All amounts shown herein,  
unless separately stated, are in mil•  
lions of German marks ("DM").  
ratably without discounts, are now useful lives. Goodwill resulting from  
determined actuarially on the  
basis of an assumed interest rate  
of 5.5%, the entry age actuarial  
capital consolidation is amortized over  
a period of five years, providing it re•  
lates to the expansion of the Group.  
During 1993, Daimler-Benz made  
several changes in accounting policies  
in order to avoid or abandon taxed pro•  
visions and to approach the account•  
ing policies generally accepted in the  
United States. The change of account•  
ing and valuation principles has in•  
creased income by DM 2.6 billion as of  
January 1, 1993. For comparibility  
purposes, this amount has been re•  
corded as extraordinary income in the  
statements of income (see Note 32).  
cost method and the consideration Where it relates to the 1989 restruc•  
of employee turnover.  
turing of the Group, it is charged to re•  
tained earnings. Goodwill resulting  
from strategic alliances is split; the  
amount relating to the expansion of  
Expense Provisions Pursuant to  
§ 249 Par. 2 of the German  
Commercial Code  
The elective right for the valuation the Group is charged to earnings and  
of expense provisions has not  
been exercised. For comparibility  
purposes, the extraordinary in•  
come also includes the effects  
from reducing accruals that were  
not necessary upon adoption of  
the new method.  
the amount relating to restructuring is  
charged to retained earnings.  
Property, plant and equipment is  
valued at acquisition or manufacturing  
cost. Self-constructed assets include  
direct costs, materials, handling and  
production overhead which includes  
The significant changes in  
accounting policies affecting income  
are as follows:  
Provisions for Deferred Repairs and depreciation.  
Maintenance  
This provision, which was previ•  
ously estimated, is now calculated applicable, accelerated depreciation  
based upon future plans for re•  
pairs and maintenance.  
Acquisition and capitalized manu•  
facturing costs are depreciated. Where  
Inventories  
The accounts of subsidiaries  
operating in highly inflationary  
economies have been translated  
using historical exchange rates  
instead of year end rates as used  
in previous years.  
methods are used in Germany, pur•  
suant to certain sections of the Ger•  
man Tax Guidelines.  
With the exception of the above,  
these changes in accounting and  
valuation principles have not resulted  
in any significant changes to income.  
At the beginning of 1993,  
Daimler-Benz changed the currency  
translation applied to the non-current  
assets of foreign subsidiaries, from  
historical exchange rates to year end  
exchange rates. Subsidiaries in highly  
inflationary countries (presently Brazil  
and Turkey) are excluded from the  
foregoing. The adjustment resulting  
from this accounting change is  
Receivables  
Only long-term non-interest or  
low-interest bearing receivables  
are present valued. The allowance  
for losses remains unchanged ex•  
cept for the allowance for general  
risks which was previously re•  
corded on a country-specific basis  
and is now recorded based upon  
company-specific considerations.  
recorded in stockholders' equity.  
Property, plant and equipment is  
depreciated over the useful lives as  
follows: 17 to 50 years for buildings,  
Raw materials, supplies and goods  
purchased for resale are valued at the  
Consolidated Group  
In addition to Daimler-Benz AG,  
lower of cost or market; finished goods the consolidated Group consists of 305  
8
3
to 20 years for site improvements,  
to 20 years for technical equipment  
are valued at manufacturing cost.  
Manufacturing costs include direct  
material, labor and applicable manu•  
domestic and foreign subsidiaries  
(1992: 271) and 12 joint ventures. The  
joint ventures are accounted for using  
and machinery and 2 to 10 years for  
factory, office and other equipment. If  
facturing overhead including deprecia• the pro rata consolidation method.  
equipment is used in multiple-shift op• tion.  
erations, the useful life is reduced ac•  
cordingly. Buildings are depreciated  
During 1993, 53 subsidiaries and  
5 joint ventures were added to the  
consolidation and 19 subsidiaries were  
deleted.  
Loss provisions are recorded for  
inventories that have long periods of  
using the greater of the straight-line or storage or changes in construction.  
the accelerated method of deprecia•  
tion. Moveable property having a use•  
ful life of four or more years is  
depreciated using the greater of the  
declining balance or the straight-line  
Non-interest or low-interest bear•  
ing receivables and other assets matu•  
ring after more than one year are pre•  
sent valued after taking into account  
all known risks. An allowance for  
In May 1993, Deutsche Aerospace  
AG acquired a 78% majority share in  
Fokker-Holding B.V., which owns 51%  
of Fokker N.V. The effects of including  
this company in the consolidated fi•  
method. Depreciation on additions dur• doubtful accounts is deducted from the nancial statements for the first time  
ing the first and second half of the  
year is calculated using full or half-  
year rates, respectively. Additional de• lower of cost or market.  
preciation is recorded wherever  
deemed necessary. Items having an  
immaterial value are expensed when  
purchased.  
receivables.  
are explained in the notes to the finan•  
cial statements. The loss for the short  
period arising prior to the acquisition,  
has been deducted from other operat•  
ing expenses.  
Other securities are valued at the  
Provisions for pensions and similar  
obligations, including postretirement  
medical benefits for retirees of U.S.  
subsidiaries, are actuarially deter•  
mined on the basis of an assumed in•  
terest rate of 6% using the entry age  
At December 31, 1993, 271 sub•  
sidiaries were not consolidated as  
their effect on the financial position  
and results of operations was not ma•  
terial (their total revenues were less  
Investments and other financial as•  
sets are valued at the lower of cost or  
market; long-term non-interest or low- actuarial cost method.  
interest bearing loans are recorded at  
present value. Investments in associ•  
ated companies are generally recorded  
on the equity method.  
Provisions for taxes and other provi• than 1 % of consolidated revenues). Ad•  
sions have been recorded using the  
principles of reasonable accounting  
ditionally, 11 other companies admin•  
istering external pension funds, whose  
valuation. The obligations in employee assets are subject to restrictions, were  
benefits and social costs have been  
recorded at the lower of the present  
value of future payments or at the pro  
rata amount, depending upon the  
respective benefits acquired.  
not included in the consolidation. The  
entire consolidated Group of Daimler-  
Benz AG is contained in the list of in•  
vestment holdings filed in the Stut•  
tgart Commercial Register as entry  
No. HRB 15 350.  
Leased equipment is valued at  
acquisition or manufactured cost and  
depreciated using the greater of the  
declining balance method or straight-  
line method. Where applicable, tax  
deductible depreciation methods  
provided in Section 35 of the Income  
Tax Guidelines are utilized.  
Liabilities are recorded at their  
repayment amounts.  
Consolidation Principles  
acquisition of Fokker, is valued in con• on the entry date or at the year end  
Capital consolidation is accom•  
plished using the book value method  
junction with the restructuring of the  
Company and, accordingly, has been  
selling rate.  
The year end exchange rate  
by netting the acquisition cost and the charged directly to retained earnings  
is generally used to translate bal•  
pro rata share of stockholders' equity  
of the subsidiary at the time of its ac•  
without affecting net income.  
ance sheet items of foreign companies  
A deferred difference arising from from the respective local currency to  
quisition or when it is first included in capital consolidation is shown sep•  
German marks. Excluded from this  
treatment are the non-current assets  
and inventories of companies in highly  
inflationary countries, where historical  
exchange rates are used.  
the consolidation. Joint ventures are  
also accounted for under this method.  
Significant investments in which  
Daimler-Benz has an ownership inter•  
est in the range of 20% to 50% are  
generally accounted for using the eq•  
uity method. Investments in which  
Daimler-Benz has an ownership inter•  
est of less than 20% are accounted for  
at cost.  
arately under "Other provisions" as  
"Difference from capital consolidation  
with accrual character."  
Appropriated retained earnings of  
acquired subsidiaries are included in  
the Company's retained earnings. The  
The difference resulting from the  
currency translation of the balance  
1993 unappropriated profit reported in sheet items is charged or credited to  
the consolidated financial statements  
stockholders' equity; for companies  
represents the unappropriated profit of operating in highly inflationary coun•  
Daimler-Benz AG. Accordingly, the  
tries translation gains or losses are ap•  
These financial statements include proceeds from consolidation measures plied to income.  
references to affiliated, associated and  
related companies. Affiliated com•  
panies include entities in which  
Daimler-Benz has majority ownership  
or an interest of 20% to 50% and  
affecting operating income and the un•  
The currency translation of non-  
appropriated profits of the subsidiaries current assets at year end exchange  
have been offset against the retained  
rates reflect translation gains or losses  
in the property, plant and equipment  
analysis, and have been shown sep•  
earnings of the Company.  
Investments in 142 associated  
which are not consolidated or ac•  
counted for on the equity method, re•  
spectively, as their effect would not be  
material. Associated companies repre•  
sent entities in which Daimler-Benz  
owns between 20% and 50% and are  
accounted for using the equity  
method. Related companies include  
entities which have a significant own•  
ership interest in Daimler-Benz or an  
entity in which a member of Daimler-  
Benz management is a board member.  
Wherever possible, the accrued  
companies are recorded in the consoli• arately in the schedule. Such transla•  
dated financial statements.  
tion gains and losses were charged or  
credited to appropriated retained earn•  
ings without affecting income. The  
readjustment of the values in the 1992  
For the year ended December 31,  
1993, 21 associated companies have  
been included in the consolidated fi•  
nancial statements at equity using the consolidated balance sheet to year end  
book value method.  
exchange rates results in a negative  
difference of DM 106 million, which  
was charged to appropriated retained  
earnings without effecting 1992 earn•  
ings.  
The remaining associated com•  
panies are reported as investments at  
acquisition cost net of applicable de•  
preciation because the ownership is  
insignificant to the financial position  
of the Company.  
All material intercompany trans•  
actions have been eliminated in con•  
solidation.  
Expense and income items are  
generally translated at the annual  
average exchange rate. Where such  
items concern non-current assets and  
inventories of companies in highly  
inflationary countries, the historical  
differences arising from capital consol•  
idation are shown under the respec•  
tive consolidated balance sheet item  
and are amortized to income over the  
The deferred taxes shown in the  
expected useful life. Goodwill is amor• consolidated balance sheet include the exchange rates are used. Net income,  
tized in accordance with the method  
discussed in "Accounting and Valua•  
tion" above. The accrued difference of  
DM 841 million, remaining after the  
elimination procedures affecting net  
income.  
appropriated retained earnings and  
unappropriated profit are translated at  
the year end exchange rate. The differ•  
ence between the annual average and  
Currency Translation  
Foreign currency assets are trans• year end exchange rates is included in  
lated at the lower of the entry date ex• "Other operating expenses" (included  
change rate or year end exchange rate; in other operating income in 1992).  
foreign currency liabilities are trans•  
lated at the higher of the selling rate  
Notes to Consolidated Balance Sheet  
At December 31, 1993, included in intangible assets are DM 523 million of goodwill  
1992: DM 611 million) from capital consolidation and from individual accounts, acquired  
(
computer software, patents and, to a lesser extent, advance payments.  
During 1993, additional amortization of goodwill amounted to DM 88 million.  
The decrease in property, plant and equipment by DM 333 million to DM 18,921 mil•  
lion is a result of DM 5,432 million in additions, DM 210 million in currency translation  
gains, and their reclassifications of minus DM 15 million, DM 751 million in disposals and  
depreciation expense amounting to DM 5,209 million. Included in depreciation expense  
is accelerated depreciation of DM 76 million (1992: DM 163 million) which is allowed  
by German tax law and additional accelerated depreciation of DM 287 million (1992:  
DM 21 million) relating to certain revaluations of property, plant and equipment.  
As a result of subsidiaries consolidated for the first time, capital expenditures in•  
creased by DM 1,854 million and depreciation by DM 909 million; of which capital expen•  
ditures of DM 1,638 million and related depreciation of DM 833 million resulted from the  
acquisition of Fokker.  
Financial assets primarily represent investments in associated companies, other loans  
and investments.  
Loss provisions, amounting to DM 298 million (1992: DM 83 million) were recorded on  
investments with non-consolidated subsidiaries.  
As a result of the first-time consolidation of Fokker, acquisition costs were increased  
by DM 147 million and amortization increased by DM 70 million.  
The increase of DM 2,102 million of leased equipment - almost exclusively vehicles -  
to DM 11,879 million primarily is the result of lease acquisitions from Mercedes-Benz  
Credit Corporation, Norwalk, USA, and MBL Mercedes-Benz Leasing GmbH & Co OHG,  
Stuttgart and, for the first time consolidation of Fokker which amounted to DM 458 mil•  
lion.  
In accordance with the provisions of tax law, additional depreciation has been re•  
corded on leased equipment in the amount of DM 5 million (1992: DM 3 million).  
The majority of consolidated inventories is from Mercedes-Benz and Deutsche Aero•  
space. The increase over 1992 amounting to DM 2,560 million, is primarily from the corpo•  
rate unit DASA, of which DM 2,066 million is from the first-time consolidation of Fokker.  
Inventory decreases were recorded in the Mercedes-Benz division.  
Advance payments received in the amount of DM 7,317 million (1992: DM 5,549 mil•  
lion) primarily represent projects and long-term contracts with AEG, DASA AG, Fokker,  
Dornier, Eurocopter and MTU. Such payments have been deducted from inventories.  
This item represents receivables from customers in the amount of DM 8,771 million  
(1992: DM 6,166 million), of which DM 5,569 million (1992: DM 2,804 million) are long-  
term receivables. An allowance for losses of DM 174 million has been recorded on these  
receivables.  
Approximately DM 0.4 billion (1992: DM 0.4 billion) of the receivables from related  
companies represent fixed interest rate debt instruments and securities.  
Tax refund claims and interest receivable are included in "Other assets." This item  
also includes liquid assets in non-marketable debt instruments amounting to DM 186 mil•  
lion (1992: DM 437 million).  
An allowance for loss of DM 1,670 million has been provided for on receivables and  
other assets.  
In November, 1993, Daimler-Benz AG and the corporate units sold 72,945 shares (par  
value of DM 3.6 million, or 0.16% of equity) to employees at a discounted price of DM 337  
per share. The remaining 49,357 shares of treasury stock were sold in the public market.  
Other securities primarily consist of fixed interest rate instruments.  
Certain current assets could have been increased by DM 27 million to their original  
values in accordance with German GAAP, however, the revaluation was not recorded due  
to a negative effect on currently payable income taxes.  
The balance of DM 2,954 million (1992: DM 2,968 million) includes cash in banks,  
cash on hand, cash in the German Bundesbank and Postbank, as well as deposits in tran•  
sit.  
The liquid assets included in various balance sheet positions total DM 10.5 billion  
(1992: DM 9.8 billion).  
Deferred taxes generated from elimination procedures affecting income total DM 323  
million (1992: DM 1,329 million). Among other things, the decrease is the result of minor  
inter-company profits from inventory reduction in the automotive sector.  
Additionally, a discount totalling DM 16 million has been included in this balance  
sheet position.  
The capital stock and additional paid-in capital pertain to Daimler-Benz AG.  
Daimler-Benz shareholders have approved, on June 26, 1991, through June 30, 1996,  
the issuance of up to DM 600 million (par value) of additional share capital.  
Retained earnings contain the German statutory provision of DM 160 million and other  
retained earnings of Daimler-Benz AG totalling DM 13,091 million. Retained earnings also  
include the group's share of the consolidated subsidiaries retained earnings and balance  
sheet results, provided the earnings were generated by such subsidiaries since joining the  
Company. Additionally, retained earnings include the cumulative effect resulting from the  
elimination of inter-company profits from the consolidation and foreign currency transla•  
tion gains and losses.  
The interest held by third-parties in the stockholders' equity of the consolidated sub•  
sidiaries primarily consists of Daimler-Benz Luft- und Raumfahrt Holding AG, AEG,  
Mercedes-Benz Mexico, Dornier, MTU and Eurocopter.  
In addition to the above a negative minority interest amounting to DM 758 million  
relates to Fokker.  
Pension accruals have increased by DM 542 million to DM 12,759 million (1992:  
DM 12,217 million) as a result of the annual increase in pension provisions.The pension  
accruals and the plan assets of the external pension plan, fully fund the Company's pen•  
sion obligations.  
Accrued taxes amounting to DM 833 million (1992: DM 764 million), represent  
currently payable income taxes for Daimler-Benz, the balance of the accrued taxes is  
currently payable for all other consolidated companies.  
The difference from capital consolidation with accrual character represents the pur•  
chase of two subsidiaries consolidated for the first time and an accrual for related start-up  
expenses.  
In addition, the company is liable for compensatory payments guaranteed by Deutsche  
Aerospace AG which cannot be reasonably estimated for 1994 and future years. For  
outside shareholders of AEG Aktiengesellschaft and Daimler-Benz Luft- und Raumfahrt  
Holding AG claims also exist for compensatory payments which cannot be reasonably  
estimated.  
Additionally, outstanding contractual performance guarantees exist for which future  
liability cannot be reasonably estimated.  
The other financial obligations are for future services from rental, leasehold and  
leasing agreements and amount to an average annual amount of DM 677 million over an  
average contractual period of 8 years.  
Other financial obligations due to non-consolidated subsidiaries, represent annual pay•  
ments due of approximately DM 34 million over an average contractual period of 13 years.  
In connection with the fiduciary settlement by Deutsche Aerospace Airbus GmbH of  
the federally guaranteed serial credits, the effective amount cannot be determined until  
the beginning of 1995 when the federal government's last tranche of DM 1 billion is due;  
this also applies to the reorganization profit received in 1989.  
Within the scope of the government-supported Airbus-Development-Program, Deut•  
sche Aerospace Airbus GmbH has agreed to assume performance portions itself. DM 199  
million thereof relate to the time after the balance sheet date, to the extent that they are  
not already reflected in the annual accounts.  
All assets acquired by Deutsche Aerospace Airbus GmbH with subsidy funds have  
been conveyed to the Federal Republic of Germany as security.  
With reference to the development work for the Airbus program, Airbus Industrie  
G.I.E. has given a performance guarantee to Agence Executive (government office in  
charge of Airbus); this guarantee was taken over by Deutsche Aerospace Airbus GmbH -  
to the extent of its share interest - without restriction. Deutsche Aerospace Airbus GmbH  
considers the obligation fully covered by the relevant agreements for the financing and  
execution of the development work.  
Beginning in 2002, the profit sharing agreement provides that the federal government  
will share 40% in the profits of Deutsche Aerospace Airbus GmbH. This requirement, in its  
economic effect, stipulates the sequence of the government's repayment demands.  
The remaining financial obligations, particularly purchase order commitments for capi•  
tal investments, are within the scope of normal business activities.  
The obligation arising from stock and capital subscriptions pursuant to Section 24 of  
the GmbH Act, amounts to DM 9 million.  
The company is jointly and severally liable for certain non-incorporated companies,  
partnerships and joint ventures. In addition, there exist performance and miscellaneous  
guarantees in connection with normal business transactions.  
Income from dissolved provisions is DM 2,348 million (1992: DM 1,519 million).  
Gains totalling DM 1,659 million were realized from the sale of securities. Additionally, the  
recapture of over-funded assets of Daimler-Benz Unterstützungskasse GmbH to Daimler-  
Benz AG resulted in income totalling DM 237 million. The source of such re-capture is the  
1992 Tax Amendment Law, which limits the over-funding of such assets. Additional  
income resulted from the currency translation gains from countries outside of Germany  
relating to open payments and deliveries. Losses from open payments and deliveries are  
included in "Other operating expenses". Additionally, income was generated from  
subrental agreements.  
Other operating income in the amount of DM 3,581 million (1992: DM 2,226 million)  
is primarily related to reductions in estimated loss provisions.  
The cost of materials compared to the total output of DM 99,494 million (1992:  
DM 100,879 million) is 51% (1992: 49%), respectively.  
The wages and salaries also include personnel expenses of DM 3.1 billion for restruc•  
turing in conjunction with workforce reductions; of this amount, DM 2.7 billion represent  
accruals for provisions.  
The number of employees also includes 11,575 people employed by Fokker. Addi•  
tionally, 10,740 people are employed in joint ventures.  
The majority of the property, plant and equipment is owned by Mercedes-Benz.  
The increase of depreciation of leased equipment over the prior year results from the  
expanded leasing activities of the domestic and foreign financial service companies.  
Other operating expenses include increases to provisions, maintenance costs, adminis•  
trative and sales costs including commissions for sales representatives, rental and leasing  
costs, currency exchange translation losses from open payments and deliveries, freight  
and packaging, and the losses from currency exchange translation of companies in highly  
inflationary countries. An accrual has been provided for future restructuring costs. Fok-  
ker's DM 94 million loss arising from the acquisition during the period from January 1  
through May 18, 1993 has been deducted from other operating expenses.  
Additionally, included in other operating expenses are DM 224 million (1992: DM 161  
million) which primarily relate to changes in estimated loss provisions.  
1
993  
1992  
DM in millions DM in millions  
Interest paid to third parties from the leasing and sales financing business amounts to  
DM 342 million (1992: DM 421 million).  
The extraordinary income, amounting to DM 2,603 million, include non-recurrent in•  
come from the new valuation methods and changes in accounting principles as explained  
in the "Summary of Accounting Policies".  
At January 1, 1993, provisions were reduced by DM 1,935 million; of this amount,  
DM 1,119 million were allocated to expenditure provisions, DM 548 million to provisions  
for employee benefits and social costs, and DM 268 million to provisions for maintenance  
costs. An additional reduction of DM 445 million resulted from a change in receivable  
valuation methods. Additional income of DM 223 million was realized from translating  
inventories of companies in highly inflationary countries using historical exchange rates  
for the first time.  
In addition to the economic slowdown of important markets, 1993 net income of  
DM 615 million was reduced by a one time charge of DM 3.5 billion, before income taxes,  
for the restructuring of capacities and reduction in workforce. Offsetting this one time  
charge was income from securities sold, from the new accounting and valuation methods  
utilized and reduced tax expenses.  
Statutory depreciation of financial and current assets had an insignificant effect on  
consolidated net income.  
Under the presumption that the proposed dividend is ratified by the shareholders at  
the Annual Meeting on May 18, 1994, the remuneration paid by the group companies to  
the members of the Board of Management and the Supervisory Board of Daimler-Benz AG  
amounts to DM 14,348,204 and DM 1,289,595 respectively. Disbursements to former  
members of the Board of Management of Daimler-Benz AG and their survivors amount to  
DM 9,790,261. An amount of DM 79,727,443 has been accrued in the financial statements  
of Daimler-Benz AG and Mercedes-Benz AG for pension obligations to former members of  
the Board of Management and their survivors. As of December 31, 1993, advances and  
loans to members of the Board of Management of Daimler-Benz AG amounted to  
DM 169,863. Home mortgages included herein are not subject to interest; other loans and  
advances bear interest averaging 5.5%. During 1993, DM 65,104 of outstanding loans was  
repaid. The terms for home mortgages are ten years and less than one year for loans and  
advance payments.  
Auditor's Report  
We rendered an unqualified opinion on the consolidated financial state•  
ments and the business review report in accordance with § 322 HGB  
(German Commercial Code). The translation of our opinion reads as follows:  
"The consolidated financial statements, which we have audited in accordance  
with professional standards, comply with the legal provisions. With due regard  
to the generally accepted accounting principles, the consolidated financial state•  
ments give a true and fair view of the assets, liabilities, financial position and  
results of operations of the Daimler-Benz group. The business review report,  
which summarizes the state of affairs of Daimler-Benz Aktiengesellschaft and  
that of the group, is consistent with the financial statements of Daimler-Benz  
Aktiengesellschaft and the consolidated financial statements."  
Frankfurt/Main, March 23, 1994  
KPMG Deutsche Treuhand-Gesellschaft  
Aktiengesellschaft  
Wirtschaftsprufungsgesellschaft  
Zielke  
Certified Public Accountant"  
Dr. Koschinsky  
"Certified Public Accountant"  
"
Proposal for the Allocation of Unappropriated Profit  
The annual financial statements of Daimler-Benz AG as of December 31, 1993,  
show an unappropriated profit of DM 390,387,317.00. It will be proposed at the  
Annual General Meeting that this amount be applied as follows:  
Stuttgart-Möhringen, March 8, 1994  
The Board of Management  
Supervisory Board  
HlLMAR KOPPER  
WOLFGANG GABELE*)  
HELMUT LENSE*)  
Frankfurt/Main  
Bremen  
Stuttgart  
Member of the Board of Management,  
Deutsche Bank AG  
Deputy Chairman of the  
Corporate Labor Council,  
Daimler-Benz Group Chairman of the  
Corporate Labor Council and the  
Joint Labor Council, AEG  
Member of the Labor Council,  
Untertürkheim Plant,  
Mercedes-Benz AG  
Chairman  
WALTER RIESTER**)  
Frankfurt/Main  
Vice-Chairman,  
KARL FEUERSTEIN*)  
Mannheim  
MANFRED GÖBELS*)  
Chairman of the Corporate Labor  
Council, Daimler-Benz Group  
Chairman of the Joint Labor  
Council, Mercedes-Benz AG  
Leonberg  
Metal-Workers' Union  
(as of 10/26/1993)  
Senior Manager, Mercedes-Benz AG  
Chairman of the Senior Managers'  
Committee, Daimler-Benz Group  
Chairman of the  
JÜRGEN SARRAZIN  
Deputy Chairman  
Frankfurt/Main  
Speaker for the Board of Management,  
Dresdner Bank AG  
Senior Joint Managers' Committee,  
Mercedes-Benz AG  
PROF. DR. RER. NAT. GERD BINNIG  
Munich  
Head of IBM Physics Group  
ERICH KLEMM*)  
DR. JUR. ROLAND SCHELLING  
Stuttgart  
Calw  
WILLI BÖHM*)  
Chairman of the Labor Council,  
Sindelfingen Plant,  
Mercedes-Benz AG  
Attorney at Law  
Kandel  
Member of the Labor Council,  
Worth Plant, Mercedes-Benz AG  
DR. MANFRED SCHNEIDER  
Leverkusen  
Chairman of the Board  
of Management, Bayer AG  
MARTIN KOHLHAUSSEN  
Frankfurt/Main  
Speaker for the Board of Management,  
Commerzbank AG  
BIRGIT BREUEL  
(as of 12/20/1993)  
Berlin  
President of the Treuhandanstalt  
PETER SCHÖNFELDER*)  
Augsburg  
(Government Agency for Privatization)  
RUDOLF KUDA*)  
Member of the Labor Council,  
Deutsche Aerospace AG  
PROF. HUBERT CURIEN  
Frankfurt/Main  
Paris  
Departmental Manager within the  
Board of Management,  
Metal-Workers' Union  
Former Minister for Research and  
Technology of the Republic of France  
PROF. DR. JUR. JOHANNES SEMLER  
Kronberg/Taunus  
Lawyer  
DR. JUR. MICHAEL ENDRES  
Frankfurt/Main  
Member of the Board of Management,  
Deutsche Bank AG  
BERNHARD WURL*)  
Mainz  
Departmental Manager within the  
Board of Management,  
Metal-Workers' Union  
*
) Elected by the employees.  
*) Judicially appointed as employee  
representative.  
*
Outgoing Members of the  
Supervisory Board:  
HERMANN I. ABS  
Frankfurt/Main  
Honorary Chairman,  
Deutsche Bank AG  
PROF. DR.-ING. E.H. DR. H.C.  
WERNER NIEFER  
Stuttgart  
(deceased 09/12/1993)  
Honorary Chairman  
DlPL.-lNG. HANS-GEORG POHL  
Hamburg  
(deceased 02/06/1994)  
Deutsche Shell AG  
RICHARD BOLLMANN*)  
(on 05/26/1993)  
Mannheim  
Senior Manager, Deputy Chairman of  
the Senior Managers' Committee,  
Mercedes-Benz AG  
DR. RER. POL. WOLFGANG RÖLLER  
Frankfurt/Main  
Chairman of the Supervisory Board,  
Dresdner Bank AG  
(on 05/26/1993)  
(
on 05/26/1993)  
PROF. DR.-ING. E.H.  
WERNER BREITSCHWERDT  
Stuttgart  
SIEGFRIED SAUTER*)  
Frankfurt/Main  
(on 05/26/1993)  
Deputy Chairman of the Corporate  
Labor Council, Daimler-Benz AG  
Chairman of the Joint Labor Council,  
AEG Aktiengesellschaft  
DR. RER. POL. HORST J. BURGARD  
Frankfurt/Main  
Member of the Supervisory Board,  
Deutsche Bank AG  
(on 05/26/1993)  
(
on 05/26/1993)  
FRANZ STEINKÜHLER*)  
Frankfurt/Main  
First Chairman,  
HELMUT FUNK*)  
Stuttgart  
Metal-Workers' Union  
Chairman of the Labor Council,  
Untertiirkheim Plant and Main Office,  
Mercedes-Benz AG  
(on 06/21/1993)  
HERMANN-JOSEF STRENGER  
Leverkusen  
(on 05/26/1993)  
Chairman of the Supervisory Board,  
Bayer AG  
HUGO LOTZE*)  
Reinhardshagen  
(on 05/26/1993)  
Chairman of the Labor Council,  
Kassel Plant,  
Mercedes-Benz AG  
(on 05/26/1993)  
*) Elected by the employees.  
Report of the Supervisory Board  
In connection with the audit en•  
Hermann Josef Abs, Frankfurt/  
Main, died on February 6, 1994. He  
served as Chairman of the Supervisory  
Board from 1955 to 1970 and subse•  
gagement, the Supervisory Board and  
KPMG had no disagreement with the  
companys' records. We approved the  
1
993 consolidated financial statements quently as Honorary Chairman. During  
of Daimler-Benz AG as prepared by the his service Mr. Abs greatly influenced  
Board of Management; and such finan•  
cial statements are hereby ratified. We  
concur with the proposal of the Board  
of Management regarding the alloca•  
tion of unappropriated profit. The con•  
the development of Daimler-Benz and  
we will always remember his achieve•  
ments and exceptional personality  
with great admiration and respect.  
Professor Werner Niefer, a former  
During 1993, the Supervisory  
solidated financial statements, the busi• member of the Board of Management  
Board held four formal meetings in  
ness review and the external auditors'  
which we were informed in detail con• report were submitted to us.  
from 1975 through May 26, 1993, died  
on September 12, 1993. On May 26,  
1993, Mr. Niefer was elected to the Su•  
pervisory Board. He was able to partici•  
pate in the Board only for a very short  
period. We would have liked to draw on  
cerning the state of the company and  
essential matters of corporate policy.  
The Supervisory Board also discussed  
these issues with the Board of Man•  
agement. Our discussions focused on  
medium-term corporate planning, in•  
cluding but not limited to capital ex•  
As s result of the regularly sched•  
uled elections to the Supervisory  
Board, at the Annual General Meeting  
on May 26, 1993, a number of  
changes were made in the Supervisory his energy and wealth of experience for  
Board. Departing the supervisory  
board were Prof. Dr.-Ing. Werner  
a long time to come. As a replacement  
for Mr. Niefer, Dr. Manfred Schneider,  
Leverkusen, was elected to the Super•  
visory Board on December 20, 1993.  
penditures, trends in employment and Breitschwerdt, Stuttgart, Dr. Horst  
earnings and further developments in  
the structuring of the group. Addi•  
tionally, we discussed major business  
transactions and made decisions  
concerning individual transactions  
which, by either law or company  
by-laws, required submission to the  
Supervisory Board for review and  
approval.  
Burgard, Frankfurt/Main, Hans-Georg  
Pohl, Hamburg, Dr. Wolfgang Röller,  
Frankfurt/Main and Hermann-Josef  
Strenger, Leverkusen. Elected to the  
supervisory board were Mrs. Birgit  
Breuel, Berlin, as well as Prof. Hubert  
Curien, Paris, Dr. jur. Michael Endres,  
Frankfurt/Main, Prof. Werner Niefer,  
Stuttgart and Jürgen Sarrazin,  
Mr. Herbert Lucy, Mannheim, died  
on January 15, 1994. From the year  
1965 until leaving the company in No•  
vember, 1989, he had been a member  
of the Supervisory Board as employee  
representative, and as of 1978 as dep•  
uty chairman. His committed efforts  
on behalf of the employees, his consci•  
entious cooperation and willingness to  
work together with trust and respect,  
earned him widespread appreciation  
and recognition - both within and out•  
side the company. We will remember  
Mr. Lucy with great admiration.  
Frankfurt/Main.  
The Supervisory Board examined  
the consolidated financial statements  
and the business review of Daimler-  
Benz AG and the group, as well as the  
proposal for the allocation of unap•  
propriated profit. KPMG Deutsche  
Treuhand-Gesellschaft AG, Wirt-  
schaftsprufungsgesellschaft,  
Also departing the Supervisory  
Board, at the close of the Annual Gen•  
eral Meeting on May 26, 1993, were  
the following employee representa•  
tives: Richard Bollmann, Mannheim,  
Helmut Funk, Stuttgart, Hugo Lotze,  
We would like to take this oppor•  
Reinhardshagen, and Siegfried Sauter, tunity to express our sincere gratitude  
Frankfurt/Main, audited the financial  
statements of Daimler-Benz AG and  
the consolidated financial statements  
of the group as of December 31, 1993, Kandel, Wolfgang Gabele, Bremen,  
as well as the business review. The  
Manfred Göbels, Leonberg, and Hel•  
Frankfurt/Main. Elected to the Super•  
visory Board were the following em•  
ployee representatives: Willi Böhm,  
to the outgoing members of the Super•  
visory Board, some of whom belonged  
to this Board for many years, for their  
active participation and their highly  
technical knowledge.  
consolidated financial statements were mut Lense, Stuttgart. Franz Stein-  
in accordance with generally accepted kiihler, Frankfurt/Main who resigned  
accounting principles. The Supervisory from the Supervisory Board on June  
Board approved the audit results of  
KPMG in a joint meeting with the  
21, 1993 was replaced by Walter Ries-  
ter, Frankfurt/Main, on October 26,  
Board of Management on April 7, 1994. 1993, by the appropriate legal body.  
Executive Management and Daimler-Benz Group Representatives  
Executive Management  
Daimler-Benz Group Representa•  
tives  
DR. JUR. BOY-JÜRGEN ANDRESEN  
JERUSALEM/TEL AVIV  
Personnel Policy  
Berlin  
BENJAMIN NAVON  
Ramban Street 11  
Jerusalem  
PETER-HANS KEILBACH  
HANSJÖRG BAUMGART  
Englerallee 40  
Daimler-Benz Art Possessions  
14195 Berlin  
Israel  
MARTIN BERGER  
Bonn  
Annual Accounts and  
Accounts Planning  
Moscow  
ALFONS PAWELCZYK  
Friedrich-Ebert-Allee 26  
53113 Bonn  
LOTHAR GLEITZE  
Prosp. Vernadskogo 9/10, App. 602  
Moscow 117311  
DR. RER. POL. ROLF A. HANSSEN*)  
Corporate Planning and Controlling  
Brussels  
Russia  
MATTHIAS KLEINERT*)  
Public Affairs and Political -  
Economic Policy  
DR. HANNS R. GLATZ  
Tokyo  
133, RUE FOISSART - BTE. 29  
RAINER JAHN  
B-l040 BRUSSELS  
BELGIUM  
Roppongi First Bldg.  
DR.-ING. MICHAEL KRÄMER  
9-9, Roppongi 1-chome  
Research 1  
Minato-ku, Tokyo 106  
Japan  
DR. RER. NAT. VOLKER LEHMANN  
Research 2  
Washington D.C.  
WERNER POLLMANN  
RICHARD H. IMUS  
Technology, Environmental Officer  
Daimler-Benz  
Suite 800, 1350 I Street, N. W  
Washington D. C. 20005-3305  
U.S.A.  
PROF. DR. RER. NAT.  
ROLF SCHARWÄCHTER*)**)  
Directorate for Group Business in  
Emerging Markets  
JÖRG SEIZER  
Subsidiaries and Affiliated Companies  
KONRAD STRAUB  
Corporate Auditing  
DR. OEC. PUBL. PAUL WICK*)  
Finance and Taxes  
DR. IUR. SOLMS WITTIG*)  
Staff Lawyer  
GERD WORIESCHECK  
Personnel Development  
for Senior Group Executives  
*) With general power of procurement.  
**) Also deputy member of the Mercedes-Benz  
Board of Management without an own  
department.  
Executive Management and Daimler-Benz Group Representatives 99  
Balance Sheet Press Conference:  
April 12, 1994  
10.00 a.m.  
Haus der Wirtschaft  
Stuttgart  
Annual General Meeting:  
May 18, 1994  
10.00 a.m.  
International Congress Center (ICC)  
Berlin  
Daimler-Benz reports on the first  
quarter of 1994 during the Balance  
Sheet Press Conference on April  
12, 1994, on the first six months with  
an audited semi-annual report at the  
end of August, 1994 and during early  
November on the first nine months of  
1994.  
Daimler-Benz AG  
IR  
70546 Stuttgart  
Telephone: 49-711-1 79 22 87  
Telefax: 49-711-1 79 41 09  
This report has been printed on  
environment-friendly paper bleached  
without the use of chlorine.  


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