VW hires Daimler veteran Renschler to push truck alliance plans

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Bloomberg / February 21, 2014

FRANKFURT -- Volkswagen appointed former Daimler executive Andreas Renschler to its management board to deepen cooperation at its commercial vehicles operations.

The 25-year Daimler veteran, who was a contender to eventually succeed Dieter Zetsche as CEO, will start at Volkswagen on Feb. 1, 2015, the company said Friday in a statement. Renschler resigned unexpectedly on Jan. 28 as operations chief at Daimler’s Mercedes-Benz unit a year after being asked to swap out of his job as the company’s trucks chief.

“We are very pleased we have been able to recruit Mr. Renschler to join our company,” VW Chairman Ferdinand Piech said in the statement. “We have found the ideal successor” to replace current trucks chief Leif Oestling, who will retire.

VW has struggled to forge closer ties between truckmaking affiliates Scania AB and MAN SE as well as increase cooperation with its own commercial-vehicles business. The German manufacturer, which took full control of Munich-based MAN last year, today said it is offering to pay 6.7 billion euros ($9.2 billion) to buy the rest of Sweden’s Scania to increase integration and squeeze out more costs.

Renschler spent almost a decade running Daimler’s truck unit, the world’s biggest by revenue. His efforts included restructuring projects in the U.S., Japan and Brazil as well as adding production in China and India. Piech, who said Oestling was key in recruiting Renschler, signaled an interest in the 55-year-old executive, when he told Stuttgarter Zeitung on Jan. 30 that “the best lure the best.”

Savings goals

Oestling, 68, will retire after his contract expires next year. The former Scania CEO has sought savings through joint projects in purchasing, development, information technology, logistics, finance and legal affairs.

Volkswagen has risen to become the world’s second-largest automaker by cutting costs and boosting profit by standardizing parts and technology across its car brands, which include Audi, Skoda and Porsche. VW is now working to adapt that strategy to its commercial-vehicle operations in an effort that began more than seven years ago.

With the takeover of Scania, Volkswagen expects to eventually save 850 million euros at its trucks unit, up from an earlier target of 200 million euros. Yet because of longer product cycles in the commercial-vehicles business, it could take 15 years to achieve these goals, the company said.

Daimler plans

Daimler’s heavy-vehicle division includes the Freightliner and Western Star truck brands in North America, Fuso in Japan and Mercedes-Benz in Europe and Brazil. Renschler outlined an efficiency program in mid-2012 while still trucks chief at Daimler. The plan targeted a 1.6 billion-euro improvement in profit by 2014 by reducing costs and improving sales.

Under his leadership, Daimler set up a truck joint venture in China with Beiqi Foton Motor Co. and created the Bharat Benz brand in India to pursue growth in emerging markets with vehicles targeted for local needs.

Last year, the Daimler unit reported a profit margin of 5.2 percent. In the first nine months of 2013, Scania’s margin was 9.4 percent, while MAN’s was just 0.4 percent.