Daimler-Benz Annual Report 1993

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 Contents technologies and system structures. The common foundations of 2 The Corporate Principles of the corporate units, their structures and the forms of cooperation Daimler-Benz are part of the distinctive corporate identity of Daimler-Benz. 3 Daimler-Benz Highlights Similar to some of our products, our corporate units do not always 4 Letter to the Stockholders draw attention to themselves. To give you more of an insight into and Friends of our Company "your" company than mere statistics and balance sheets can 6 Board of Management provide and, above all, to show you how we are positioning for 8 Report of the the future - we have given our annual report a new look. Board of Management 8 Business Review 14 Operating Activities of the Group 42 Central Corporate Functions 62 The Daimler-Benz Share 65 Discussion and Analysis of the Financial Situation 74 Financial Statements 95 Proposal for the Allocation of Unappropriated Profit 96 Supervisory Board 98 Report of the Supervisory Board 99 Directors and Daimler-Benz Group Representatives 100 Principal Subsidiaries and Affiliated Companies 102 Daimler-Benz in Figures The Corporate Principles of Daimler-Benz Our work at Daimler-Benz serves We aim to learn better and faster Our core businesses include people and their environment. than our competitors. To achieve vehicles for passenger and freight We aim to offer the world's most this, we need not only flexible organ transportation, rail systems, aerospace, advanced products, systems and ser izational structures but also em propulsion systems, defense systems, vices. ployees who think entrepreneurially. automation, energy systems tech This requires a continual committ Key to our success are employees nology, and information-technology ment to technical, business, and social with a sense of responsibility, inde services. In these areas, Daimler-Benz innovation as well as a corporate cul pendence, creativity, drive, teamwork, strives to be a world leader. ture characterized not by compla and openness to new ideas. We there Furthermore, we are active in cer cency, but by creative unrest. fore promote every employee's per tain specialized areas, such as applied In a world increasingly complex, sonal development to the best of our microelectronics, selected financial with promising opportunities - but abilities. services, and countertrading, where also risks - even minor events can we aim to be highly competitive. To a take on consequences of major propor i Daimler-Benz does business in great extent, these activities interlink tions. Therefore, we must carefully all corners of the globe. We are our core business areas. weigh our every action. 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 the world. Therefore, we view competi four corporate units. Thus, Mercedes- and sparingly. This sense of respon tion as a welcome proving ground. The Benz, AEG Daimler-Benz Industrie, sibility must be reflected in all our 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 Group. success is an undeniable part of this brella of Daimler-Benz, the managing recognition. holding company of our group. Our customers are the focus of Inherent to our philosophy is re our efforts. We must strive not spect for other cultures. As an interna Our cooperation aims to: just to meet their expectations, but to tional company, we reject all forms of exceed them. Cooperation and the discrimination. This principle applies, Combine know-how and experi open exchange of know-how through moreover, to the filling of management ence to create new dimensions out all areas of our companies are cen positions, where we will extend equal - Responsibly promoting prog tral to meeting this goal. opportunities to every employee ress for everyone Just as we are accountable to our regardless of nationality. We are proud to continue a distin customers, we are equally responsible guished tradition guided by these prin to the companies' owners as well as to Daimler-Benz is an integrated ciples. the public. This means we must be technology group. This means willing to provide feedback to others that our various business areas are and to assess ourselves openly and linked by cross cutting technologies honestly. 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 We do, however, expect the eco cially during the latter half of 1993, ards in the quality and content of our nomic recovery, which began taking have allready been reflected in sub company reports. As an international shape during the last quarter of 1993, stantial success. We are optimistic corporation, we wish to provide our to continue in 1994. During the last that this decidedly positive trend will investors, customers and suppliers the four years, we have built the right continue as we broaden and renew our world over, as well as our employees, foundations to benefit from this up product ranges; particulary at the car with the highest possible standard of turn. In view of the declines suffered and commercial vehicle divisions of information. Accordingly, we submit in nearly all our fields of business dur Mercedes-Benz, we are very convinced this annual report to all those who ing 1993, this may seem presump that we can, through internal growth, have links with our company and un tuous. However, my colleagues and reach our demanding goals using our derscore why those links will continue I are convinced that these difficult own resources. to be rewarding. times have confirmed just how This is consistent with the fact 1993 was an extremely difficult healthy the basic substance of that, like other industrial manufac year, not only for Daimler-Benz. Daimler-Benz really is. We possess the turers, we are reviewing possible Moreover, while the first signs of the vitality and potential to assure a areas of cooperation with both compet end of the deep economic recession healthy future for our company in itors and suppliers in sectors periph are beginning to appear, we cannot spite of the difficulties we have all eral to our core production activities. expect a significant upturn in most of endured. Indeed alliances, joint ventures and our main markets before the end of We have decided to propose the new forms of cooperation will remain this year at the earliest. The role payment of a dividend in the amount on the agenda not just in this year but which the unsatisfactory development of DM 8. Against the background of also in the years to come. of wages, and monetary policy have business trends, and in view of the Proud as we are of increasing pro played in this is largely undisputed. considerable burdens we have placed ductivity, we are not blind to the fact Conditions have not improved in on our employees, many people may that our competitors are also devoting other areas as well. This also applies consider it more appropriate not to enormous effort, to improving effi to government policy on purchasing as pay a dividend this year. However, we ciency and lowering costs. This means well as on the public sponsorship of believe our proposal to be appropriate that we must, and will, take further research and development, especially because we want our sharholders to measures. At times, these steps may in defense technology and the aero benefit from the long-term earnings seem unconventional, and will involve space industry. This is despite the fact potential of Daimler-Benz which con labor, and increasingly, capital. It also that these key technologies for the fu tinues to be very promising. means that we must continuously re ture are needed more than ever if we Productivity and efficiency in the view the locations of our operations to are to secure competitiveness - and entire group, with regard to both labor determine if they are compatible with therefore also jobs - both in Germany and capital, have increased signifi an internationally competitive produc and throughout Europe. cantly. The extensive and continuing tion structure. The first consequences 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 We will continue to work reso Due to a high level of non globalize our activities to attain the lutely and rapidly to ensure an optimal recurrent expenditures again this best positions on the world markets of alignment of our areas of operation. year, 1994 will not be easy. Even so, tomorrow. We shall also continue to This can be accomplished with a high we are expecting a significant im focus the core capabilities of our inte degree of precision, now that we have provement.

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