Here is the latest on DaimlerChrysler from today's Frankfurter Allgemeine
Zeitung
www.faz.com
Mr. Gentz, who was born in the Latvian capital, Riga, grew up in Berlin. He
studied law and earned a Ph.D at Berlin's Freie Universität. Since 1970, Mr.
Gentz has been with the Stuttgart-based car manufacturer. Mr. Gentz made his
way up to the management board via personnel and financial-service provider
Debis. He was placed in charge of finance and controlling in 1997.
Daimler Rejects Talk of Liquidity Crisis
F.A.Z.: DaimlerChrysler will collect $7 billion from the financial markets
through a corporate bond issue. This high sum has triggered speculation
about the group's liquidity situation. Is DaimlerChrysler in the midst of a
financial crisis?
Manfred Gentz: We are not in a financial crisis. DaimlerChrysler has gross
liquidity of euro 12 billion ($11.4 billion) at its disposal, of which the
industrial business alone accounts for euro 10 billion, according to
preliminary figures for 2000. We also have firmly guaranteed credits in the
two-digit billions with a consortium of international banks. We have not
even touched them yet and we don't intend to either. This alone shows you
that we have considerable financial leeway. The corporate bond we issued has
been accepted very well by the market, which also reflects the enormous
trust in DaimlerChrysler's long-term creditworthiness.
Your liquidity has decreased substantially in the past few months. Is the
correct conclusion that Chrysler is losing more money than Mercedes-Benz is
earning? Or are other company divisions also using up reserves?
It is true that our liquidity went down significantly during the year. On a
comparable basis, our gross liquid funds declined from euro 16.9 billion at
the start of the year to euro 12 billion at the end of 2000. It is also true
that Chrysler made an operating loss in the second half. This loss, however,
was only a minor cause of the decline in liquidity. Much more significant
were primarily substantial acquisitions of euro 4.5 billion, which we made
in 2000 and with which we have positioned ourselves as a global carmaker. It
is also not the case that other company divisions are using up reserves.
Particularly the Mercedes-Benz car division as well as the commercial
vehicle division produce excellent earnings.
How do you define gross and net liquidity from industrial activity?
We distinguish between the gross liquidity of the group and that of the
industrial business. Net liquidity from the industrial business is the
difference between the gross liquidity of the industrial business and the
portion of total debt accounted for by the industrial business.
How do things look when taking financial services into account?
Including financial services, we believe group liquidity reached euro 12
billion, as we already mentioned. Financial debt -- including financial
services -- will reach around euro 83 billion. This produces net debt of
around euro 71 billion. Thus, financial services have a strong impact on the
group balance sheet.
DaimlerChrysler is committed to a stable dividend policy. The 1999 dividend
was euro 2.35. What is the outlook for 2000?
The management and supervisory boards will suggest a dividend. We will take
into account our stable dividend philosophy as well as the profit
development. It is completely out of the question that DaimlerChrysler is in
the position to afford the same dividend as in the previous year.
The interview was conducted by Holger Appel.
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