How Daimler and Benz Built the World’s Oldest Automaker and Disrupted the Industry

[Music] daimler mercedes benz that these terms have to do with cars is clear but what exactly do they mean and more importantly how did they come to be the billion dollar enterprises they are today to uncover that we need to travel back in time all the way to the 19th century the pioneers of automobile manufacturer at the time were gottlieb daimler and carl benz although the two german men never met personally they ironically both developed the world's first automobiles in the very same year however it wasn't until many decades later that daimler benz would become

a thing and it was a merger that neither godlee or carl celebrated want to find out how the world's oldest automaker became what it is today then make sure to keep watching a little spoiler you may be surprised to hear that forced laborers and concentration camp detainees unfortunately had something to do with the company's massive success when we talk about daimler bins two names need to be brought up gottlieb daimler and carl benz in the black and white photographs these two white bearded men look like brothers in spirit but in reality they never actually spoke

to each other yet they are ironically united by the fact that they both ushered in the era of individual automotive mobility in 1886 on the one hand there was the patent ben's motor car made in mannheim and on the other there was daimler's motorized carriage from stuttgart this made the fact that they never spoke to each other all the more remarkable because the invention that put them in the history books could have easily brought them together since their homes in stuttgart and mannheim were less than 100 kilometers apart [Music] but alas that didn't happen and

while ben's applied for a patent for his three-wheel motor car daimler proudly finished the world's first four-wheeled motorcar both of the developments were groundbreaking but while their inventions were impressive it would take several years before they would find commercial success the early years of the 20th century were full of new technological developments and in 1900 emil jelinek asked the daimler motor and gesellschaft to develop a new type of car the vehicle had to be light beautiful and fast in other words innovative jalanik was a big name at that time he was the largest dealer in

daimler automobiles and he had contacts throughout the upper echelons of society dmg knew they couldn't let him down and so wilhelm maybach was tasked with the job considering that jelinek wanted the car to be fast and light maybach decided to design a racing car for him jelinek had a habit of entering automobile races under the pseudonym mercedes which was also the name of his daughter so when dmg delivered their first innovative vehicle to him jelinek named it the mercedes 35ps this was the first use of the name mercedes on a vehicle jelinik used the mercedes

35ps for racing and it was a smashing success the vehicle set new standards throughout the automotive industry and in 1902 dmg registered the name mercedes as a trademark the mercedes brand was born now that we have all of those different names out of the way let's move on to the next part daimler benz daimler bins was created in 1926 by the merger of the world's two oldest manufacturers of motor vehicles daimler motor and gesellschaft and bins and c it was an event that neither bins nor daimler celebrated but the reason why may not be what

you would have guessed you see by 1926 carl benz was already in his 80s and he had retired from the operational business and gottlieb daimler he had already died in 1900 at the age of 65. in other words celebrating the merger together was literally impossible however considering the fact that banks had pressured the two companies to merge due to the dire situation the world was in it's safe to say that the two innovators wouldn't have been too pleased either way although the merger created a foundation for what was probably the south germany region's biggest success

story of all time it was definitely not a love match it was in the midst of the 1920s with high inflation and many crises in the end of the first world war presented great challenges for german automotive industry in the years from 1914 to 1919 everyone had been focusing on the war and hardly any development work had been carried out on commercial products economically the collapse of the german currency and its loss of important foreign markets had a negative effect add to this the arrival of new foreign producers on the domestic market and you can

see how a severe structural crisis was taking place in the german automotive industry even more so because some of these foreign producers like the ford motor company for example were further rated by their efforts by the peace treaty of versailles daimler ben's ag was facing an uphill battle then the second world war came by the summer of 1941 world war ii had been going on for two years already in daimler benz's board of management no longer envisaged a swift end to the war or return to producing civilian vehicles the demand for passenger cars kept declining

and by the end of 1942 it even virtually came to a standstill instead the most important line of business now was truck production and daimler benz was completely focusing on the manufacture and assembly of military components as many workers were fighting on the front line new staff were needed to handle the increased armament production initially the company recruited women to cope with the demand but that wasn't enough and so they also began using forced laborers as well while forced laborers from western europe lived in guest houses private accommodations or schools workers from eastern europe and

prisoners of war were interned in barrack camps with poor prison-like conditions these prisoners of war were mostly abducted civilians and detainees from concentration camps they were monitored by the ss under inhumane conditions and they were even loaned out to companies in exchange for money in 1944 almost half of daimler-benz's 63 610 employees were civilian forced laborers prisoners of war or concentration camp detainees but how unjust as it may be the company truly prospered during these times and they continued using concentration camp slave laborers right up till the final days of the third reich but the

years after that wouldn't turn out to be as lucrative anymore it was 1945 and the war was finally over while people all over the world rejoiced not everyone was happy and the assessment of the war damage was particularly disillusioning for daimler-benz under the potsdam agreement all german assets abroad were confiscated and used for the payment of reparations daimler bins lost all foreign subsidiaries affiliates and branches as well as all assets in the soviet occupied areas because of this the international network which had previously been in place was now destroyed and a thorough reconstruction was needed

in the beginning one of their plants operated mainly as a repair facility for u.s military vehicles and the denotification of daimler-benz's top management also led to fundamental changes for example otto hope who previously had to leave the board of management because of his jewish wife was now reappointed after extensive efforts the company received a new production permit from the american occupation authorities in 1946 and despite the chaotic financial situation their balance sheet for the year 1948 49 already showed a profit would they be able to regain their power during the period of 1949 to 1960

daimler-benz succeeded in regaining the position it had enjoyed before the second world war the german automotive industry was expanding quickly again and as early as 1954 daimler-benz already broke its existing sales record by cracking the billion mark in terms of turnover the high sales figure became a symbol of the german economic miracle and the increased development of commercial vehicles reflected high growth rates of the economy overall throughout the 1950s daimler-benz almost held a monopoly as the manufacturer of diesel engines and the demand for mercedes-benz cars even exceeded the company's production possibilities so to ensure the

necessary expansion of capacity it took over auto union auto union was founded in 1932 and it was an amalgamation of four german automobile manufacturers org dkw vonar and audi the combined might of these four companies allowed auto union to become the second largest automaker in germany at the time of its creation but now more than two decades later a new leader was in town and while the automotive industry was subject to sharp fluctuations in sales during the next decade daimler-benz managed to retain its outstanding position in europe it was leading both in the production of

cars for discerning clientele as well as trucks and buses something that's still the case today with the significant increase in sales and production the company continued the steady upward trend that had prevailed since the war had ended and in fact it was not even interrupted by the oil crisis of 1973 which had been an unusually difficult year for the international automotive industry daimler-benz seemed unfazed by it all and instead it managed to continuously extend the basis of its business during the next decades by 1998 the liaison of daimler-benz had endured for 72 years but now

it was time for a change taking advancing globalization into account the company announced its merger with chrysler corporation to form daimler chrysler it was a german-american match made in heaven and the goal was to safeguard the long-term competitiveness of the companies involved one decade later however a general meeting approved the change of the name from daimler chrysler to daimler with approximately ninety nine percent of the five thousand assembled shareholders voting in favor the guiding principle behind this name change was the need to make a clear distinction between the company brand daimler and the group's various

product brands and so the renaming of the company also involved renaming its production facilities and sales organizations finally some two years later daimler had relinquished the 19.9 percent stake it had initially retained in chrysler but little did anyone know a global economic crisis was incoming as a result of the real estate crisis in the usa recession set in worldwide in the global economic crisis also deeply affected the automotive industry the increasingly gloomy market situation led to severe losses but despite the worldwide economic uncertainty daimler's sound financial position enabled it to continue investing large sums in

research and development and even to this day more than a century after the company was first founded it has carried on this pioneering spirit after the financial and economic crisis daimler managed to make a shining comeback in 2010 its products were in strong demand and the order books were filled many daimler plants were working at their capacity limit and the company had double-digit growth rates in all business divisions in addition they also continued to drive forward with strategic partners in 2010 daimler and renault nissan agreed on a far-reaching strategic cooperation for example but there was

also a little problem with so many different products it became harder and harder to run everything under the same company name for many years daimler-benz has been dealing with a dichotomy of selling some of the world's most prestigious cars while also selling commercial vans buses unimogs and heavy trucks and as it is the largest truck and bus producer in the world investors have long pushed for it to split off the heavy vehicle operations to free up capital and take advantage of hidden value in february of 2021 they finally got their way that month daimler ceo

ola kellanius revealed his plans to split daimler in half by renaming it as mercedes-benz and daimler truck he called the move a profound reshaping of the company and when discussing the reasons behind it he said the following mercedes-benz is the world's most valuable luxury car brand offering the most desirable cars to discerning customers daimler truck supplies industry-leading transportation solutions and services to customers both companies operate in industries that are facing major technological and structural changes given this context we believe that we will be able to operate most effectively as independent entities equipped with a strong

net liquidity and free from the constraints of a conglomerate structure something tells me he might be right this was the story of daimler it all started in 1886 when two innovative entrepreneurs changed the automobile industry forever their companies merged over four decades later and today mercedes-benz is still the main luxury automotive division of the daimler group it has an estimated brand value of nearly 50 billion dollars and daimler's yearly revenue is more than three times as much not bad at all have you already heard of daimler's history in the many different people and companies who

are involved in it and are there any important key players or events that you would have liked to have seen mentioned in the video share it in the comments and don't forget to check out our channel for more inspiring business videos