Mercedes mess Daimler recalls 774,000 diesel Mercedes after CEO meets with official

Dieter Zetsche met with Transport Minister Andreas Scheuer after the cabinet official set a deadline to quantify the number of vehicles needing a fix due to emissions manipulation.
Was in the neighborhood, thought I’d drop by.

The announcement by Daimler that it was recalling 774,000 diesel Mercedes vehicles in Europe raised more doubts than ever about the veracity of the automaker’s claim that its cars never had emissions-cheating devices like those in the Volkswagen group.

The mandatory recall came after Daimler boss Dieter Zetsche met for the second time in two weeks with Transport Minister Andreas Scheuer, who had threatened the company with heavy fines unless they came up with a realistic number of how many cars needed to be fixed by a given deadline.

A previously required recall of Vito vans at that time affected only 6,300 vehicles. The new recall adds the GLC SUV and sedans in the C-class, affecting some 238,000 vehicles in Germany. Germany’s Federal Motor Transport Authority (KBA) identified five illegal switch-off functions in Mercedes vehicles, according to a report in the daily newspaper Bild.

There are also suspicions that the Euro 6 fleet may be fitted with illegal devices that show the legally permissable amounts of toxic emissions during testing, but emit much higher levels in regular use. That could affect another million vehicles. Daimler said it would appeal the KBA's findings, but this does not affect the new recall.

Even the workforce has started to doubt company managers.

Given the size and scope of the new recall, Mr. Zetsche said after the meeting that Mr. Scheuer has withdrawn the threat of fines.

At the time of the Vito recall, the company denied that cheating devices were fitted into the cars. “The functions are part of a complex exhaust gas purification system designed to ensure robust exhaust gas purification under different driving conditions and over the service life of a vehicle,” Daimler said. Since then the company pledged cooperation and transparency.

From the moment the Dieselgate scandal first broke in 2015, Mr. Zetsche has categorically denied that Daimler used the defeat devices employed by Volkswagen. If that turns out to be not true, it could be a fatal blow for Mr. Zetsche’s career.

In the meantime, the controversy and now the recalls are hurting Mercedes' brand image. Even the workforce has started to doubt company management. “Their biggest concern is that a lot more [information] regarding exhaust emissions could come out than what was previously known,” Wolfgang Nieke, chairman of the works council at Daimler’s sprawling Untertürkheim plant, said in a recent newspaper interview. “We are experiencing a clear decline in trust at all factories with every bit of news.” Daimler's management will address workers' questions in a meeting planned for next week.

While Mr. Zetsche's meeting took place in Berlin, prosecutors in Munich conducted a raid on Audi CEO Rupert Stadler’s home and announced he was a target in the emissions fraud probe of that luxury carmaker, also a unit of Volkswagen. Far from going away, the Dieselgate scandal continues to ripple in ever-widening circles.

Handelsblatt reporters Daniel Dehaes, Markus Fasse and Martin Murphy contributed to this report. Handelsblatt Global editor Darrell Delamaide adapted it into English. To contact the authors: [email protected], [email protected], [email protected] and [email protected].