Daimler-Benz Annual Report 1988

Highlights Contents 2 Members of the Supervisory Board and the Board of Management 4 To the Stockholders and Friends of our Company Report of the Board of Management 9 Business Review The Group's Divisions Mercedes-Benz Division 18 Passenger Cars 28 Commercial Vehicles 36 AEG Division Deutsche Aerospace Division 41 Dornier 44 MTU Motoren- und Turbinen-Union 47 Research and Technology 50 Employees 56 Finance Financial Statements 66 Consolidated Balance Sheet 67 Consolidated Statement of Income 68 Balance Sheet of Daimler-Benz AG 69 Statement of Income of Daimler-Benz AG 70 Consolidated Non-Current Assets 71 Non-Current Assets of Daimler-Benz AG 72 Notes to Consolidated Financial Statements and to Financial Statements of Daimler-Benz AG 84 Proposal for the Allocation of Unappropriated Profit 86 Report of the Supervisory Board 89 Tables and Graphs Supervisory Board (Aufsichtsrat) HERMANN J. ABS WILLI BÖHM*) DR. JUR. JOHANNES SEMLER Frankfurt am Main Kandel Kronberg/Taunus Honorary Chairman, Deutsche Bank AG Member of the Labor Council, Worth Plant Member of the Board of Management, Honorary Chairman Mercedes-Automobil-Holding AG PROF. DR.-ING. E. h. WERNER BREITSCHWERDT DR. RER. POL. ALFRED HERRHAUSEN Stuttgart FRANZ STEINKÜHLER*) Frankfurt am Main Frankfurt am Main Member of the Board of Management, DR. RER. POL. HORST J. BURGARD First Chairman, Metal-Workers' Union Deutsche Bank AG Frankfurt am Main Member of the Board of Management, HERMANN-JOSEF STRENGER Chairman Deutsche Bank AG Leverkusen Chairman of the Board of Management, HERBERT LUCY*) HELMUT FUNK*) Bayer AG Mannheim Stuttgart Chairman of the Labor Council, Chairman of the Labor Council, PROF. DR. JUR. GERHARD TREMER Daimler-Benz AG Unterturkheim Plant and Main Office Gräfelfing near Munich Deputy Chairman Member of the Board of Management, RICHARD HELKEN*) Bayerische Landesbank Girozentrale Achim-Bierden Deputy Chairman of the Supervisory Board, Chairman of the Labor Council, Mercedes-Automobil-Holding AG Bremen Plant DIPL.-ING. ERICH KLEMM*) MARIA-CHRISTINE FÜRSTIN VON URACH*) Calw Stuttgart Member of the Labor Council, Director Sindelfingen Plant BERNHARD WURL*) RUDOLF KUDA*) Mainz Frankfurt am Main Departmental Manager within the Board Departmental Manager within the Board of Management,- Metal-Workers' Union of Management, Metal-Workers' Union HUGO LOTZE*) Retired from the Supervisory Board Reinhardshagen on 1st July 1988 Chairman of the Labor Council, Kassel Plant DR. RER. POL. KLAUS MERTIN Frankfurt am Main DIPL.-ING. HANS-GEORG POHL Member of the Board of Management, Hamburg Deutsche Bank AG Chairman of the Board of Management, Deutsche Shell AG ALFRED SCHAIBLE*) Renningen DR. RER. POL. WOLFGANG RÖLLER Chairman of the Labor Council, Frankfurt am Main Sindelfingen Plant Speaker for the Board of Management, Dresdner Bank AG DIPLOM-KAUFMANN GÜNTER VOGELSANG Düsseldorf DR. JUR. ROLAND SCHELLING Stuttgart Attorney at Law DR. JUR. WALTER SEIPP Frankfurt am Main Chairman of the Board of Management, Commerzbank AG *) Elected by the employees Board of Management (Vorstand) EDZARD REUTER DR.-ING. DR.-ING. E. h. HANS DINGER Retired from the Board of Management Stuttgart Friedrichshafen Chairman MTU HANS-JÜRGEN HINRICHS Stuttgart PROF. DR.-ING. E. h. DR. h. c. WERNER NIEFER HEINZ DÜRR Sales Stuttgart Frankfurt am Main (to 9th November 1988) AEG Deputy Chairman Passenger Car Division DR. JUR. MANFRED GENTZ Stuttgart Employment DR.-ING. RUDOLF HÖRNIG Stuttgart Research and Technology DR. RER. POL. GERHARD LIENER Stuttgart Finance and Materials Management DR.-ING. E. h. JOHANN SCHÄFFLER Friedrichshafen Dornier HELMUT WERNER Stuttgart Commercial Vehicle Division JüRGEN HUBBERT (deputy member) Stuttgart Passenger Car Division JÜRGEN E. SCHREMPP (deputy member) Stuttgart Deutsche Aerospace To the Stockholders and Friends of our Company From the beginning, competition, ate this homogeneity. We think that we technology and changes in human val will then have a considerable part of ues have determined business activity; the most difficult phase behind us. since then, phases of new productive We have been introducing further energy and of consolidation have re measures, such as adapting manageri presented the two poles between which al structures and reporting to the new we operate. requirements, since January 1st 1989, Over the last few years, much that is and here increasing progress is being basically new has come into being. A made. A growing number of our em series of new basic technologies, es ployees are coming to realize that the pecially information technology, has shape of the new Group will provide been finding increasing and varied use them with new prospects in their work. in industry. An equally important fac We are convinced that it is in this - as tor is the rapidly spreading globaliza it has always been - that the actual tion of competition, in which the devel reason for the Group's success is to opment of the Single European Market be found. plays an important part. Yet we do not imagine that we have Countless German and foreign com more talented people working for us panies are reacting to these challenges than other companies. We are optimis by redirecting their traditional strate tic that we will continue to be success gies. Daimler-Benz is no exception. ful because we nurture our particular The change which we have initiated, tradition. The pride of being able to from a purely automotive company to work in the Daimler-Benz Group is a high-technology group with its main based not least on the cooperation of focus of activity on automobiles, pre all and the willingness to work towards supposes the willingness to accept risks a common goal. This is why the Board and a certain amount of unpleasant of Management considered it a respon ness. In our opinion, however, it is not sible step to initiate a process which so much the expansion of the Group demands much of many people. This which of itself involves risk. The size of is balanced out by major opportunities the company as a whole is determined of strategic importance. automatically by the nature of its prod Primarily, the expansion of the ucts, which can no longer be develop Group secures us maximum growth po ed, manufactured and sold in smaller tential in the automotive sector. At the dimensions. At the same time, the same time, though, it makes us less de phase of restructuring in which we cur pendent on our core source of busi rently find ourselves necessitates parti ness in case, at some time, the era of cular care. growth in automotive production - In a transitional phase of this kind, which has now been going on for four certain risks inevitably arise from the decades - should come to an end. As fact that the necessary homogeneity of things stand at present, however, the the individual company units, and thus automotive industry can definitely count also of the decision-making process on the continued stimuli emanating throughout the Group, is negatively af from the new technologies. The field fected. The organizational decisions of microelectronics, in particular, is be which we are asking you, as stockhold coming indispensable in motor vehicle ers, to make, will greatly help to cre- design and manufacturing. This is re- To the stockholders and friends of our company suiting, in some cases, in completely reduction of duplicated capacities and new tasks, eg for systems technology, the creation of larger, more effective which in principle has for a long time units, so that growth potential, which been a routine component in the aero is far above average, can be properly space sector. Microelectronics are gain exploited. ing in importance because vehicles are It is therefore only logical if, in or being equipped with "eyes" and "ears" der to aid this structural streamlining, which link them with traffic systems. efforts are made to make a private in Since our expanded Group puts all dustrial company responsible both for such technological capabilities at our the performance and the managerial disposal, we will be able to maintain control of Messerschmitt-Bölkow-Blohm our role as a pacemaker and a pio GmbH. Such a move is essential if the neer despite fiercer competition. subsidies which were needed to allow The Group's expansion is no less im the Airbus to be built are to be grad portant for those sections not involved ually removed. with the automotive business. From the Without two decisions made in 1988, coordinated collaboration within the the negotiations on the setting up of Group, these sections reap a large our aerospace division would not have number of benefits. been possible. The company-interlinking We have succeeded in advancing the contract with AEG and the agreements development of the Group successful made between the proprietors concern ly in this direction. Our goals have not ing managerial control of Dornier changed since 1985, they have become GmbH by Daimler-Benz enable the more clearly defined. In addition to the Group member-companies to devise a two fields of automotive business and clear and, above all, uniform manage the broad area of microelectronics and rial structure for those areas of busi systems technology, with their many ap ness activity which in each case be plications for products and industrial long together. manufacturing systems, we have decid In future, Daimler-Benz AG is to be ed to build up a third major focus of a holding company with overall mana activity. This is to be an aerospace di gerial responsibility for the three divi vision which will be efficient not only sions of Mercedes-Benz, AEG and on a national, but also on an interna Deutsche Aerospace, coordinating, con tional scale. trolling and monitoring them in all stra The action that needs to be taken tegic matters of interest to the Group to do this in any case coincides with as a whole.

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