AutoBeta(AutoBeta.net)04/03 Report--

According to foreign media reports, in response to the impact of the COVID-19 epidemic crisis, Daimler Group has signed a credit line agreement of 12 billion euros (92.2 billion yuan) to enhance its financial flexibility in the event of the epidemic crisis. Daimler said that the banks that signed the loans, including BNP Paribas, BNP Paribas, Deutsche Bank and JPMorgan Chase, could be used within 12 months, with two options for an extension of six months.

It is understood that two years ago, Daimler Group signed a credit line of 11 billion euros with some international banks, which will be provided until 2025, and this credit will be based on existing credit. In other words, with this credit line, the German car company is already in debt of hundreds of billions of yuan.

According to Daimler's fiscal 2019 results, although group turnover rose 3 per cent year-on-year to 172.7 billion euros in 2019, net profit fell 64.5 per cent to 2.7 billion euros. Most importantly, free cash flow was only 1.4 billion euros, down 51.7 per cent from the same period last year.

Daimler's poor performance has bothered Daimler, and the global spread of the COVID-19 epidemic has exacerbated the financial pressure on the German carmaker. Since mid-March, a number of Daimler plants in Europe and the United States have been closed, initially at Bremen, Rastat and Sindfengen in Germany. Subsequently, the Hambach plant in France, the Moscow plant in Russia, and the Tuscaloosa and Charleston plants in the United States were shut down for as little as two weeks.

In response to the impact of the epidemic, Daimler announced on April 2 that board chairman Ola Kllenius and members of the company's management committee would cut their fixed pay by 20% from April 1 to the end of the year. In addition, the pay of other executives will be reduced by 10% over the next three months.

Under the continued spread of the epidemic, automobile production and sales in Europe and the United States have stagnated for a time, and major car companies are taking a series of measures to deal with the impact of the epidemic, including expanding profits and income, cutting costs and expenditure, and obtaining cash flow through credit to tide over the crisis.

Cutting management pay in the wake of the epidemic is nothing new. Earlier, the three major U. S. automakers Fiat Chrysler, Ford and General Motors all announced pay cuts. Among them, FCA's salary will be halved in the three months starting in April. The other 19 members of the group's executive committee will be cut by 30%; GM board executives will reduce their total pay by 20%, and office white-collar employees will temporarily cut their salaries by 20%. Wage delays for salaried employees in North American factories will temporarily cut wages by 20%; Ford will defer salaries of the company's top 300 executives by 20% and 100% to varying degrees. Of these, Bill Ford, Ford's executive chairman, will postpone 100 per cent of his salary, while Ford CEO Jim Hackett, Jim Farley and CFO Tim Stone will postpone 50 per cent of their salaries, effective May 1.

The number of confirmed cases of COVID-19 outside China has reached 813726, according to the latest data released by the World Health Organization on Tuesday. A number of car companies have announced that factories will open in mid-April this year, but the outbreak is still explosive in many countries, the inflection point is far away, and the plan to start work in mid-April may become a bubble.

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