Mercedes eyes Silicon Valley-style overhaul

German carmaker Mercedes Benz is taking tips from Silicon Valley for a management overhaul to help it see off younger rivals. Lucy Fielder reports.

(Reuters) – It invented the car 130 years ago…now venerable Mercedes Benz is turning to the young’uns for a few tips.

The German carmaker is planning a Silicon Valley-style overhaul to speed up decision-making

And fight off rivals

Especially California-based electric carmaker Tesla.

Daimler, Mercedes’ parent company, originally dismissed Tesla as a bit player.

…That’s until its Model S outsold the Mercedes S-Class in the United States last year, showing there’s a market for premium electric cars.


“Mercedes doesn’t directly feel threatened by Tesla, but it is worried that as a large company with about 280,000 employees, it can’t really be as agile as smaller start-up firms that have basically 15-20,000 employees. And so it’s thinking about how it can change its own internal processes to become leaner, slimmer, more agile and faster.”

So Mercedes is working at flattening its hierarchies and encouraging innovation.

A hundred managers were sent to Silicon Valley to tour Apple, Google and Uber.


“German corporations are very bureaucratic and hierarchical and they have up to six different management layers, each level has to approve significant investments. Silicon Valley companies basically have the entrepreneur and a skeleton crew and these decisions about which tech people should back are taken very quickly.”

Advances in technology are forcing carmakers to constantly upgrade to stay cutting edge.

Daimler and Tesla are vying to dominate the premium electric car market…

Speed – in the decisions as much as the cars – will decide the winner.