Mercedes Shows the Car Industry Can't Be Trusted
A shocking profit warning less than three weeks after the last one. This goes beyond the usual kitchen-sinking by a new boss.
Kitchen-sunk.
Photographer: Bloomberg/BloombergProfit warnings are never pleasant but few are as comprehensively horrible as the one Daimler AG served up on Friday. If the German car giant’s intention was to convince the investment community that it doesn’t have a grip on its business or earnings forecasts, then well played. Mission accomplished.
Usually a warning that spans product recall costs, legal issues, production delays and weak demand might be excused as “kitchen-sinking” (getting all of your bad news out at once). Ola Kaellenius took over as chief executive from Dieter Zetsche in May and a change at the top is often a good moment to reset investor expectations.