jhpmbusa

https://www.yahoo.com/autos/mercedes...174700091.html

Hmmm, they are either going to have to cut costs or make us pay more for our cars to re-coup the $20M.... either way it seems like they have lost interests in repairing our cars or making them properly in the first place! lol

ua549

This was simply a paperwork glitch in the Orwellian NTHSA rules. The amount of the fine is simply a cost of doing business. It is immaterial to the MBUSA income statement or the Daimler balance sheet. That is less than twelve hundredths of 1 percent of the DDAIF revenue for 2018.

jhpmbusa

Not to say you are wrong or anything, but $20 million is still $20 million no matter how you look at it. Revenue doesn't equal profits. Either way that $20M is coming out of your bottom line.

ua549

From an earnings perspective the $20 million expense has about as much impact on DDAIF as a the impact of a $275 expense on a person earning $100,000 - hardly noticeable.

jhpmbusa

This is a MBUSA fine. Not a Daimler AG fine. At 20 million, heads will/should roll. 20 Million is 200 S classes at 100k each and we are not even talking about profit here. If each S class made 10k in profit (which they absolutely do not) then that is 2000 S classes. Either way, this is proof that they are less concerned about quality and they are heavily into production these days. Hence, the cause of all our stress and complaints.

Think about how many new models and cars they have been producing since a few years back. While Dr. Z's reign, the company wasn't doing so well and he quickly had to change his philosophy... fortunately for him he did extend his time at the company one more time before leaving for retirement. From my point of view, the company has refocused into looking after profitability more than before, instead of looking into exclusivity,reliability and quality. This is just my thought tho... you can easily tell this by all their lineups starting to look the same.

rraisley

I get upset at much less costs than that, if it can be avoided.

jhpmbusa

I agree. Plus that's relatively speaking. What you can do with 20M vs 275 dollars is substantially different. 20M could have been spent on an investment, R&D or anything else that could have returned the investment back in double... or at least in the bank!

ua549

The fines were about not meeting 5 day and 40 day arbitrary deadlines set by the bureaucracy. They had nothing to do with quality (or lack thereof). Every brand has many NHTSA events each year. MBUSA is merely a division and integral part of Daimler AG. Even though 2018 was not a very good year, DDAIF had a greater than 11% return on equity. I appreciate that because dividends are above 6.5%. As a shareholder I care more about the company's profitability than the "prestige factor" of owning a Daimler AG product. The bottom line is a Mercedes car is just that, a car similar to other lux brands available for purchase.

jhpmbusa

haha as a non Daimler stockholder, but rather a "car holder" i'd rather have them build me great cars rather than focus on profitability, but that's just me. To each their own!

rraisley

Using the same ratio, that's more than $275 on each and every S-Class, somewhat less on E-Classes. Saving or losing in the neighborhood of $275 on each car sold (or even half that)? THAT will definitely be noticeable!

I kind of think most of the quoted figures above are off, though. MB sold 134,642 cars in the US as of June 1, which if it continues, gives about 323,000 cars sold this year (very approximately - it's probably not linear, and mine isn't bought yet). So wasting $20 million gives an average of $62 per car. Nothing like quoted above, but I GUARANTEE you that any auto manufacturer is hurt by losing $62 per car, and has spent many millions trying to reduce the price per unit less than that.

joshg1001

at least the 20M is tax deductible so its really only 14 million on the books.

ua549

That is NOT $275 on each and every S Class vehicle! The comparison is on profit not sales or revenue. US per vehicle sales comparisons are not relevant for an international company. You are comparing apples to oranges. Daimler is not losing any money on any of the vehicles they produce. If you have $100,000 net income (after taxes) the $275 comes off that. $275 is more like an afternoon at a sporting event or an evening out for someone with $8,333 cash in their pocket each month. It is an inconsequential expense in the overall DDAIF financial performance.

jhpmbusa

At any rate $20M is huge, you can hire execs, consultants, marketing, the possibilities are endless. It's definitely going to leave a bitter taste in their mouths for sure.... just unfortunate... whether for them or for the consumer. Hope they can negotiate the fine!

JTK44

Fines and penalties are not tax deductible

Corporate tax rate is 21%. This is moot as penalties and/or fines are not tax deductible. But if they were, the after tax cost would be $16 million not $14.

ua549

MB spent $1.4 billion to name some stadium in Atlanta, GA. It makes one wonder what tangible benefit, if any, accrues from such an expense.

JTK44

Actually it is $12 million a year for 27 years, total $324 million not $1.4 billion

see:https://www.autonews.com/article/201...lcons-new-home

additionally Mercedes spent between $50 and $60 million for naming rights to the Super Dome in New Orleans.

see: https://www.sportsbusinessdaily.com/...Superdome.aspx

jhpmbusa

Want to hear something crazy about all that? So in 2015 Steve Cannon (MB CEO at that time) moves the US headquarters from NJ to Atlanta, obviously many families/employees were impacted by this.... right afterwards he resigns as the CEO and goes works for the Falcons... everyone was extremely pissed/upset about that....now it looks like the current MB CEO is following his old boss' footsteps...

https://www.autonews.com/executives/...ts-parent-firm

ua549

Sorry, the stadium cost $1.4 billion - not the naming rights.

When working for Falcons was mentioned I had to check the name because the first one that came to mind was NAFA, North American Falconers Association. They hold many events in Georgia.