Daimler AG (OTC:DDAIF) is about to release earnings. Ponder this Bear Case Scenario:
Mercedes-Benz is clearly a leading luxury brand. However in the luxury world brand loyalty is not as strong. Consumers with substantial bank accounts are discerning and will often own several cars from competing lines. You’re only as good as your last move.
The industry in general suffers from a global excess of production capacity. China cannot buy up every foreign brand. If anything they host much of the excess capacity.
The German facilities are heavily unionized. While relationships are peaceful at the present unionized workers are expensive and inflexible as to work rules. Eventually all unions stampede their membership over a cliff. All large companies with large unions eventually go bankrupt.
Name one large company with a strong union that hasn’t gone over the edge.
George Gutowski writes from a caveat emptor perspective.