Counter-Motions of the Shareholders EG and JG
7th Annual Meeting of DaimlerChrysler AG
April 6, 2005 in Berlin

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Counter-Motions of the Shareholders EG and JG
7th Annual Meeting of DaimlerChrysler AG
April 6, 2005 in Berlin

Annual Meeting 2005 - Counter-Motions

As follows, you will find counter-motions from shareholders who oppose the proposals made by the Board of Management and the Supervisory Board on the Agenda of the Annual Meeting on April 6, 2005, which the Company has to make accessible to all shareholders.


7th Annual Meeting of DaimlerChrysler AG

April 6, 2005, Berlin Trade-Fair Center (Messe Berlin)

Dear Shareholders,

For our Annual Meeting to be held in Berlin on April 6, 2005, some shareholders have submitted counter-motions to Agenda Items 3 and 4.The following counter-motions are listed in chronological order as they were received by DaimlerChrysler.

Counter-Motions of the Shareholder JG and EG 7th Annual Meeting of DaimlerChrysler AG
April 6, 2005 in Berlin

Counter-Motion Jürgen Grässlin-1:

Regarding Item 3 of the Agenda:

»The actions of the members of the Board of Management are not to be ratified.


Jürgen E. Schrempp became Chairman of the Board of Management of Daimler-Benz AG in 1995 which is now ten years ago. In the first few years he managed the Group in the fast lane with increases in revenues and earnings as well as workforce expansion from 311,000 employees in 1995 to 441,500 in 1998.

But then Mr. Schrempp announced his vision of becoming the »Number 1« of all automobile companies. The mistaken investments as a result of this totally exaggerated goal were still having a dramatic impact on business developments in 2004.

The entry into becoming a so-called »global corporation« was the takeover of Chrysler Corporation which Mr. Schrempp initiated in 1998, and which we Critical Shareholders rejected at the Annual Meeting in September 1998. And quite rightly, as the announced »marriage made in heaven« turned into a »gamble on earth«. If Mr. Schrempp initially deceived the board and shareholders of Chrysler about his true intentions, he revealed them to the Financial Times in October 2000: »The structure that we now have with Chrysler (as an independent department) was always the structure that I wanted.« (Quote from the FT of October 30, 2000.)

As a consequence, Co-Chairman Robert J. Eaton was pushed out of the Group at an early stage and the number of US members of the Board of Management fell dramatically. Chrysler’s degradation to a Daimler department led to the sale of large numbers of shares by US shareholders. Schrempp’s promises on the Chrysler takeover »You are the owners of a company with tremendous growth prospects,« (HV 1999) proved to be a non-starter for a long time. For many years, Chrysler vehicles could only be sold with exorbitant discounts.

With the acquisition of a 37% stake in Mitsubishi Motors, Mr. Schrempp and the Daimler Board of Management wasted more millions of euros on a decrepit car company. But Mr. Schrempp painted a picture of a highly lucrative and market-dominating automotive group that would open the door to the Asian market for DaimlerChrysler. Once again, the Board of Management’s analyses were completely wrong and led our company into an even deeper crisis. If the Supervisory Board, supported by most of the Board of Management, had not prevented him from investing more money in Mitsubishi in April 2004, Mr. Schrempp would have wasted billions more.

The consequences of these and other wrong decisions (such as the investment in Hyundai) have to be accepted by the shareholders and employees. The market capitalization was halved, the share price fell from € 94.90 (1999) to € 35.26 (2004), the dividend fell from € 2.35 (1999) to € 1.50 (2004) per share, and the workforce was reduced from 466,938 (1999) to 384,723 (2004) employees.

Mr. Schrempp suffered a total humiliation when he was named »Worst Manager of the Year« by Business Week in January 2004.

Today we have before us the scrap heap of Schrempp’s visions of a global corporation. Of the three former pillars - Mercedes, Mitsubishi and Chrysler - only Chrysler is relatively stable. Even the Mercedes Car Group is meanwhile driving in reverse, earnings have fallen by 47% due to quality problems.

The former promises of a 25% share of vehicle sales in Asia due to the investments in Mitsubishi and Hyundai are nothing but waste paper. Now China is being propagated as the automobile market of the future, which may well be the case for many companies, but not for DaimlerChrysler. Because with the stricter environmental-protection laws Mercedes will not be able to sell many sedans in China as of 2008. The next crash is already pre-programmed.

The concentration on the core business of making cars, which has been promised for many years, has not happened either. DaimlerChrysler and its associated companies have been degraded into a department store, which now produces oversized Maybach and loss-making smart cars, unattractive Mitsubishi and poor-quality Mercedes vehicles, inhuman mine-laying systems and nuclear-weapons carriers in breach of international law. And while production figures at Mercedes have to be reduced, Daimler’s associated company EADS is rising to be a leading armaments producer and exporter with the Eurofighter and the A400M military transporter.

In review, the decade with Schrempp at the head of the Board of Management is a lost decade. He has missed by a long way the goals he set himself of forging the most innovative and future-oriented mobility group. In the end, Mr. Schrempp will go down as the biggest destroyer of jobs, shareholder value and market capitalization in the history of Daimler-Benz and DaimlerChrysler AG but with many times his former salary. Ten years of Schrempp? No reason to celebrate!«

Counter-Motion Jürgen Grässlin-2:

Regarding Item 4 of the Agenda:

»The actions of the Supervisory Board are not to be ratified.


Last year, the Supervisory Board once again failed to pass a resolution on the individualized listing of the compensation of the members of the Board of Management. Meanwhile, 18 of the 30 companies in the DAX, the top German share index, list the salaries of each of their board of management members in their annual reports.

DaimlerChrysler, however, is still one of the black sheep, which is incomprehensible from a shareholder’s point of view. The Critical Shareholders thus have to assume that through this secrecy those members of the Board of Management are meant to be hidden who, due among other things to their inadequate performance, had to accept reductions in compensation compared with the prior year.

Even Deutsche Bank AG now publishes the compensation paid to its CEO, Josef Ackermann. It is therefore impossible to understand the fact that the former Deutsche Bank CEO and present DaimlerChrysler Supervisory Board Chairman Hilmar Kopper apparently does not make any efforts to disclose the compensation of DaimlerChrysler Board of Management Chairman Schrempp and the other members of the Board of Management. In this way, Mr. Kopper is losing credibility and making himself the accomplice of Board of Management interests.

This attitude fits into the sad tradition of incomprehensible and damaging decisions by the DaimlerChrysler Supervisory Board especially of the members representing the shareholders - which for a long time has not fulfilled its monitoring function and is also an utter failure in this respect.«

Counter-Motion Jürgen Grässlin-3:

Regarding Item 6 of the Agenda:

»The Annual Meeting is not to authorize the Board
of Management to acquire the Company’s own shares.


As a result of its spectacularly mistaken decisions, the Board of Management is responsible for dramatic job cuts, the fall in market capitalization and the slump in the price of DaimlerChrysler shares from € 94.90 (April 27, 1999) to € 35.26 (December 31, 2004).

Following these events, the salaries of the employees and top management were reduced, which was praised in the media as setting an example. But this reduction in managers’ salaries could prove to be a diversion in the near future. Because with the acquisition of a large number of the Company’s own shares, Board of Management members will profit from the currently low share price if the stock suddenly rises. The authorization for the purchase of own shares is to cover a total amount of up to € 263,000,000, and thus nearly 10% of the equity capital. In other words: DaimlerChrysler executives who have run down the share price by two thirds with their disastrous business policy could profit substantially from the loss in value they caused themselves if the share price rises in the future.

The shocking signal connected with this policy would be: First destroy the value of your company’s stock, then acquire a large number of shares when the price is down, and subsequently profit from the next increase in value.

The link between the share price and Board of Management salaries is also worrying, because this means that top managers - in line with the shareholder-value approach - are primarily interested in a short-term increase in the share price. A sustained business policy, which only has a positive effect for the Company and its employees in the medium or long term, becomes unattractive for the Board of Management members. When choosing between the good of the Company and the balance on their own bank accounts, the members of the Board of Management will always decide in favor of their personal advantage - even if they earnestly preach to the contrary.

The business policy of primarily share-price oriented Board of Management decisions must finally be opposed. Particularly in times of Hartz IV and one-euro jobs, DaimlerChrysler may not become a symbol of shameless self-enrichment by the top executives.«

Counter-Motion Eva Grässlin-1:

Regarding Item 3 of the Agenda:

»The actions of the members of the Board of Management are not to be ratified.


In July 2004, the company’s management attempted in a blackmailing manner to play off the employees in Sindelfingen, Untertürkheim, Bremen and South Africa. The mismanagement of Jürgen Schrempp and his Board of Management colleagues with years of capital expenditure to save Chrysler and the mistaken investment in Mitsubishi Motors now have to be paid for by the workforce.

The top management has to be held responsible for blatant misjudgment, so an honest declaration of blame on their part and the halving of Board of Management salaries would have been appropriate. But while the Board of Management preaches water to the workforce, it is enlarging its own wine cellar by multiplying its total remuneration, as has happened in recent years.

In his speech at the 2003 Annual Meeting, Mr. Schrempp praised DaimlerChrysler’s »success factors«. In his opinion these include »a high degree of communication skills, as well as … sensitivity, respect and tolerance. But above all one thing is important: team spirit. And I am particularly pleased that in the whole company I detect a strong feeling of togetherness and a very good atmosphere«.

Exactly this team spirit was destroyed at the latest at that moment when Mr. Hubbert in his function at that time as Head of Mercedes claimed: »If we do not eliminate the Baden-Württemberg illness, the result will be a dramatic loss of jobs.« Whoever makes threats with unpaid additional working time, a reduced Christmas bonus, up to 100 hours overtime a year at the normal hourly rate, more temporary workers, shorter intervals on the assembly lines, Saturday as a regular working day, the elimination of breaks and much more, whoever gradually implements this scenario, this person throws Mr. Schrempp’s high-flown words into the waste-paper basket.

This person says: »External polls confirm that we are one of the most popular employers in the world. We are proud of this reputation. And we are working daily on living up to this claim.« Measured by the actions of the Board of Management, there is not much left of this. Social standards are to be sacrificed, the various locations are played off against each other.

Only through massive employee protests was some weakening of the planned measures achieved. Contrary to the hopes of the Board of Management, the workforce was not split, but the seeds of mistrust and uncertainty will blossom - and that is not for the good of the company. In the view of the Critical Shareholders (, with this strategy DaimlerChrysler is taking a gamble with the motivation and creativity of the workforce. Business locations in Germany cannot be secured with demotivated employees.

Instead of continuing to present himself as a job killer and capital destroyer, Jürgen E. Schrempp should introduce technologies that protect jobs and secure the future such as the series production of a car that consumes two liters of fuel per hundred kilometers.«

Counter-Motion Eva Grässlin-2:

Regarding Item 4 of the Agenda:

»The actions of the Supervisory Board are not to be ratified.


As was already the case with the majority shareholding in Fokker NV and the so-called fusion with Chrysler Corporation, the Supervisory Board under the leadership of Hilmar Kopper once again failed to control the Board of Management in the case of Mitsubishi, and failed to take the necessary decisions. Solely the investment in Mitsubishi Motors Company resulted in several million euros being wasted.

Contrary to many years of rose-tinted spectacles of the Daimler management, Mitsubishi today is in a miserable state:

> Customers are buying fewer and fewer automobiles from Mitsubishi.

> Mitsubishi has debts of € 8.5 billion.

> The company’s headquarters in Tokyo are being sold off too cheaply. Where the company’s future headquarters will be is not yet clear.

Despite this development, which was indicated for a long time in advance, the Board of Management did not decided until April 2004 that DaimlerChrysler would not supply any more millions of subsidies. A Supervisory Board functioning as a monitoring body would have acted long ago and influenced the Board of Management to get out of Mitsubishi. Instead, the members in particular representing the shareholders prove to be highly paid yes-men.

The money that has been senselessly wasted as a result of false Board of Management decisions was reclaimed in 2004 from quite a different source: In order to achieve savings of € 500 million, last summer the Board of Management played off the employees in the plants in the south of Germany, Bremen and South Africa.

This procedure is evidence of a purely profit-oriented shareholder-value mentality. Through wage cuts and other disadvantages, the employees have to make up for the mistakes that the Board of Management has made costing billions of euros and that the Supervisory Board has made with its own failings.

Instead of wasting money on Mitsubishi, it would have been far more sensible to invest the money in maintaining social and employment standards, in quality development at the Mercedes Car Group, and in the creation of new jobs by promoting ecological mobility.

With the gradual retreat from Mitsubishi it is becoming increasingly clear that Schrempp’s global corporation has failed. But instead of firing the Board of Management Chairman, he has been awarded exorbitant salary increases in recent years. All we need now is the decision that Mr. Schrempp is to be appointed Chairman of the Supervisory Board, then the disaster will be complete.«

Position of the management on the counter-motions for the 2005 Annual Meeting
(Position of the management to all counter-motions)

The Board of Management and the Supervisory Board maintain their motions as laid down in the Agenda and state their position on the counter-motions as follows:

Group strategy

We will consistently pursue the course of our Group strategy. Our goal remains to be present with our strong brands on a global scale and to supply our customers with innovative vehicles at the highest technological level available. The year 2004 has shown that we are on the right track: Not only were we able to compensate for varying cycles in the divisions and differing regional developments at Group level, but in total we actually increased our earnings.

Our global and strong presence in all major automobile markets enables us to participate in the dynamic market growth of the emerging economies, outside our major markets of North America, Western Europe and Japan. In this way, we can achieve a sustained improvement in our cost position due to our rising production volumes.

With our excellent products tailored to fulfill customers’ expectations, we intend to expand our market position in our established segments and to create additional demand in new niches and selected segments. Some examples of this are exciting vehicles such as the SLK and the CLS from Mercedes-Benz, the Chrysler 300C or the further developed Atego and Axor trucks, which we successfully launched in 2004. The numerous national and international awards that these vehicles have received underscore the tremendous position of our product range.

The decision on whether to continue providing financial support to Mitsubishi Motors (MMC) was the subject of a special Supervisory Board meeting held in the second half of April last year. Following an intensive exchange of opinions, the Board of Management and the Supervisory Board decided not to participate in the capital increase planned by MMC, but to continue working on the current alliance projects as far as possible.

Board of Management and Supervisory Board issues

The compensation of the Board of Management is presented in the Annual Report divided into its fixed and variable elements as well as components with a long-term incentive effect. This information is crucial for assessing whether the division of such compensation between fixed and performance-related components is appropriate and whether the structure of such compensation provides adequate incentives for the Board of Management. As the Board of Management operates according to the principle of collective responsibility, the incentives provided for the Board of Management as a whole are the decisive factor, not those for each individual member. Another factor is that listing these details individually could lead to a leveling of performance-related and task-related differences in compensation.

With the selection of a candidate for election to the Supervisory Board, priority was placed on the candidate’s experience and expertise, as well as on the desire for an international composition of the Supervisory Board, as this reflects the strategic orientation of the Group. Due to his previous and current positions in the United States and France and as a member of supervisory boards of other major European companies, Mr. Lagardère fulfills these requirements to the highest degree.

With its personnel decisions at the Board of Management level in the year 2004, the Supervisory Board created the right conditions for the steady and uninterrupted management of DaimlerChrysler AG.

Employment / personnel issues

With the agreement concluded between the management and the Group’s labor council entitled »Securing the Future 2012«, DaimlerChrysler is pursuing the following key goals: improving competitiveness, enhancing innovative power, securing employment and increasing labor flexibility. In addition to the actions agreed upon, which will lead to annual cost savings of € 500 million in the medium term, we have created other framework conditions to enable product and investment decisions in favor of Germany as an industrial location.

With the Group-wide agreement entitled »Promotion of Women«, we set ourselves ambitious goals for the wage earners at the facilities in Germany already in November 2000. With a proportion of 12.5% women in the workforce and 19.5% women among the trainees and apprentices, we have achieved or surpassed these goals. We have initiated various projects in cooperation with universities designed to create a broad basis of highly qualified women in the Group and to encourage further potential for women in management from this basis. In addition, we focus on promoting women’s career development within the context of our management and development processes.

Quality of Mercedes-Benz passenger cars

Quality is one of the most important attributes of the Mercedes-Benz brand; our current quality offensive is therefore at the focus of the activities of the Mercedes Car Group. We are taking a whole package of measures to ensure top quality at all levels - from vehicle design and development through production to sales and service. The quality offensive has already yielded clear results with the vehicles being produced today. The cars that leave our factories today have the best quality that we have ever produced. We have also taken extensive measures to secure an excellent level of quality for all of the vehicles that are already in customers’ ownership, and these actions will be continued.

Emissions / diesel particulate filters

DaimlerChrysler has been working successfully on the reduction of emissions for a long time now. By applying innovative technologies and new concepts, DaimlerChrysler has reduced the carbon-dioxide emissions of its passenger cars in Europe alone by 18% since 1995.

With our modern diesel cars, we reduced not only the particulate matter but all relevant emissions to a significant degree. Some examples of this are the reduction in total levels of nitrogen oxide and hydrocarbons by about 70% since 1995, and particulate matter by more than 90%. And starting in the summer of 2005, Mercedes-Benz will be the first automobile brand worldwide to equip all of its diesel passenger cars from the A-Class to the S-Class - 30 models altogether - with diesel particulate filters as standard equipment in Germany, Austria, the Netherlands and Switzerland. The innovative particulate filter system developed by Mercedes-Benz, which has been available in C-, E- and S-Class cars since the fall of 2003, is the world’s first system in passenger cars to work without the use of additives, and has the advantages of durability and practicability while maintaining the high economy of diesel engines.

We continue to aim to fulfill future norms before they come into effect, making an active contribution to environmental protection while allowing our customers to benefit from tax advantages.

The technical path we have chosen takes account of the entire system of the combustion engine, as ultimately only the overall improvement of combustion processes inside the engine will allow emissions to be optimized. At the same time, we are making great efforts in the research and development of promising alternative drive concepts, with priority being placed on hybrid-drive and fuel-cell technologies.

Formula 1 activities

In Formula 1, the Mercedes-Benz brand has won two world championships and three times been runner-up in the last seven years. We were thus the most successful major manufacturer in that period. We are not satisfied with the results we achieved last year. Our goal for the year 2005 is to continue the positive development shown in the second half of the 2004 season.

Defense technology

Questions on defense technology and landmines have been answered completely and in detail in previous annual meetings. We can only repeat that DaimlerChrysler has never produced landmines and never will. In last year’s annual meeting we stated that UNICEF, the United Nations Children’s Fund, put us back onto its list of suppliers in July 2003. This situation is still unchanged.

Authorization to acquire own shares

The proposed authorization under Item 6 of the Agenda to acquire our own shares is to be renewed so that, if required, the Company can make flexible use of the possibilities explained on page 15f of the Agenda. There are no plans to exercise this authority at present.

The Board of Management and the Supervisory Board reserve the right to make more detailed statements on the individual counter-motions at the Annual Meeting on April 6, 2005.

Stuttgart-Möhringen, March 2005
DaimlerChrysler AG