FRANKFURT - The woes are mounting at DaimlerChrysler, with many institutional investors wanting to confront chief executive Juergen Schrempp at the car-maker's annual meeting in Berlin today, say media reports.
Handelsbatt newspaper reported that fund managers SEB and Union Invest wanted to deny their approval to the executive board. Together,
they own about 16.5 million DaimlerChrysler shares.
Handelsblatt said shareholders with 88.49 per cent of DaimlerChrysler stock backed management's performance at last year's annual meeting, down from 99 per cent the year before.
Germany's biggest fund, DWS, was also considering going against the management this time.
"Only after the answers of the executive board will we decide how we will vote at the meeting," said DWS spokesman Thomas Richter.
DWS is a subsidiary of one of DaimlerChrysler's major shareholders, Deutsche Bank.
The reported harsh criticism by institutional investors came after DaimlerChrysler's luxury brand, Mercedes, suffered quality problems.
Last week, DaimlerChrysler recalled 1.3 million Mercedes vehicles, the biggest recall in its history.
Schrempp told Der Spiegel magazine that the recall was down to mistakes in supply management.
"It was wrong to rely fully and completely on system suppliers who supply a complete navigation system or an engine management system," he said.
Schrempp also dismissed speculation that Chrysler chief Dieter Zetsche had ruined his chances of succeeding Schrempp by opposing his plan to continue funding Japanese ally Mitsubishi Motors.
"That is complete nonsense," Schrempp said. "It's not the style of this company or mine that the decisions made in certain committees have any sort of relevance to the career of a management board member."
Zetsche opposed Schrempp's lobbying last year to keep providing money for Mitsubishi. DaimlerChrysler's board subsequently cut off additional financial support last April.
Defending his performance, Schrempp said that under his reign shareholders had received a total return of about 6 per cent a year.
Last week, DaimlerChrysler said it would spend up to 1.2 billion ($2.2 billion) this year to revamp its ailing Smart car brand.
Bending it at Benz
* Investors are unhappy with DaimlerChrysler's executive board.
* Last week, 1.3 million Mercedes vehicles were recalled.
* Problems in supply management have been blamed.
* Mitsubishi and the Smart car are a continuing drain on performance.
- REUTERS
