Position of the management on the counter-motions for the 2005 Annual Meeting
The Board of Management and the Supervisory Board maintain their motions as laid down in the Agenda and state their position on the counter-motions as follows:
Group strategy
We will consistently pursue the course of our Group strategy. Our goal remains to be present with our strong brands on a global scale and to supply our customers with innovative vehicles at the highest technological level available. The year 2004 has shown that we are on the right track: Not only were we able to compensate for varying cycles in the divisions and differing regional developments at Group level, but in total we actually increased our earnings.
Our global and strong presence in all major automobile markets enables us to participate in the dynamic market growth of the emerging economies, outside our major markets of North America, Western Europe and Japan. In this way, we can achieve a sustained improvement in our cost position due to our rising production volumes.
With our excellent products tailored to fulfill customers’ expectations, we intend to expand our market position in our established segments and to create additional demand in new niches and selected segments. Some examples of this are exciting vehicles such as the SLK and the CLS from Mercedes-Benz, the Chrysler 300C or the further developed Atego and Axor trucks, which we successfully launched in 2004. The numerous national and international awards that these vehicles have received underscore the tremendous position of our product range.
The decision on whether to continue providing financial support to Mitsubishi Motors (MMC) was the subject of a special Supervisory Board meeting held in the second half of April last year. Following an intensive exchange of opinions, the Board of Management and the Supervisory Board decided not to participate in the capital increase planned by MMC, but to continue working on the current alliance projects as far as possible.
Board of Management and Supervisory Board issues
The compensation of the Board of Management is presented in the Annual Report divided into its fixed and variable elements as well as components with a long-term incentive effect. This information is crucial for assessing whether the division of such compensation between fixed and performance-related components is appropriate and whether the structure of such compensation provides adequate incentives for the Board of Management. As the Board of Management operates according to the principle of collective responsibility, the incentives provided for the Board of Management as a whole are the decisive factor, not those for each individual member. Another factor is that listing these details individually could lead to a leveling of performance-related and task-related differences in compensation.
With the selection of a candidate for election to the Supervisory Board, priority was placed on the candidate’s experience and expertise, as well as on the desire for an international composition of the Supervisory Board, as this reflects the strategic orientation of the Group. Due to his previous and current positions in the United States and France and as a member of supervisory boards of other major European companies, Mr. Lagardère fulfills these requirements to the highest degree.
With its personnel decisions at the Board of Management level in the year 2004, the Supervisory Board created the right conditions for the steady and uninterrupted management of DaimlerChrysler AG.
Employment / personnel issues
With the agreement concluded between the management and the Group’s labor council entitled “Securing the Future 2012”, DaimlerChrysler is pursuing the following key goals: improving competitiveness, enhancing innovative power, securing employment and increasing labor flexibility. In addition to the actions agreed upon, which will lead to annual cost savings of €500 million in the medium term, we have created other framework conditions to enable product and investment decisions in favor of Germany as an industrial location.
With the Group-wide agreement entitled “Promotion of Women”, we set ourselves ambitious goals for the wage earners at the facilities in Germany already in November 2000. With a proportion of 12.5% women in the workforce and 19.5% women among the trainees and apprentices, we have achieved or surpassed these goals. We have initiated various projects in cooperation with universities designed to create a broad basis of highly qualified women in the Group and to encourage further potential for women in management from this basis. In addition, we focus on promoting women’s career development within the context of our management and development processes.
Quality of Mercedes-Benz passenger cars
Quality is one of the most important attributes of the Mercedes-Benz brand; our current quality offensive is therefore at the focus of the activities of the Mercedes Car Group. We are taking a whole package of measures to ensure top quality at all levels — from vehicle design and development through production to sales and service. The quality offensive has already yielded clear results with the vehicles being produced today. The cars that leave our factories today have the best quality that we have ever produced. We have also taken extensive measures to secure an excellent level of quality for all of the vehicles that are already in customers’ ownership, and these actions will be continued.
Emissions / diesel particulate filters
DaimlerChrysler has been working successfully on the reduction of emissions for a long time now. By applying innovative technologies and new concepts, DaimlerChrysler has reduced the carbon-dioxide emissions of its passenger cars in Europe alone by 18% since 1995.
With our modern diesel cars, we reduced not only the particulate matter but all relevant emissions to a significant degree. Some examples of this are the reduction in total levels of nitrogen oxide and hydrocarbons by about 70% since 1995, and particulate matter by more than 90%. And starting in the summer of 2005, Mercedes-Benz will be the first automobile brand worldwide to equip all of its diesel passenger cars from the A-Class to the S-Class – 30 models altogether - with diesel particulate filters as standard equipment in Germany, Austria, the Netherlands and Switzerland. The innovative particulate filter system developed by Mercedes-Benz, which has been available in C-, E- and S-Class cars since the fall of 2003, is the world’s first system in passenger cars to work without the use of additives, and has the advantages of durability and practicability while maintaining the high economy of diesel engines.
We continue to aim to fulfill future norms before they come into effect, making an active contribution to environmental protection while allowing our customers to benefit from tax advantages.
The technical path we have chosen takes account of the entire system of the combustion engine, as ultimately only the overall improvement of combustion processes inside the engine will allow emissions to be optimized. At the same time, we are making great efforts in the research and development of promising alternative drive concepts, with priority being placed on hybrid-drive and fuel-cell technologies.
Formula 1 activities
In Formula 1, the Mercedes-Benz brand has won two world championships and three times been runner-up in the last seven years. We were thus the most successful major manufacturer in that period. We are not satisfied with the results we achieved last year. Our goal for the year 2005 is to continue the positive development shown in the second half of the 2004 season.
Defense technology
Questions on defense technology and landmines have been answered completely and in detail in previous annual meetings. We can only repeat that DaimlerChrysler has never produced landmines and never will. In last year’s annual meeting we stated that UNICEF, the United Nations Children’s Fund, put us back onto its list of suppliers in July 2003. This situation is still unchanged.
Authorization to acquire own shares
The proposed authorization under Item 6 of the Agenda to acquire our own shares is to be renewed so that, if required, the Company can make flexible use of the possibilities explained on page 15f of the Agenda. There are no plans to exercise this authority at present.
The Board of Management and the Supervisory Board reserve the right to make more detailed statements on the individual counter-motions at the Annual Meeting on April 6, 2005.
Stuttgart-Möhringen, March 2005
DaimlerChrysler AG
