FIRST AIRED: August 24, 2016

Nice work! Enjoy the show!

×

You’re busy. We get it.

Stay on top of the news with our Editor’s Picks newsletter.

US Edition
Intl. Edition
Unsubscribe at any time. One click, it’s gone.

Thanks for signing up!

We've got more news

Get our editor’s daily email summary of what’s going on in the world.

US Edition
Intl. Edition
Replay Program

Business

Mercedes eyes Silicon Valley-style overhaul

Opening sequence

Opening sequence

Business

Mercedes eyes Silicon Valley-style overhaul

0:00
17:52
More Info

COMING UP:Mercedes eyes Silicon Valley-style overhaul

×

Transcript

00:00:00
>> It invented the car 130 years ago, now venerable Mercedes Benz is turning to the younguns for a few tips. The German car maker is planning a Silicon Valley style overhaul to speed up decision making and fight off rivals. Especially California based electric car maker, Tesla. Daimler, Mercedes' parent company, originally dismissed Tesla as a bit player.
00:00:24
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. Reuters' Edward Taylor reports from Frankfurt.>> Mercedes didn't feel directly 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 startup firms that have basically 15,000 to 20,000 employees.
00:00:49
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 hierarchy. And encouraging innovation. 100 managers were sent to Silicon Valley, to tour Apple, Google, and Uber.>> German corporations are very bureaucratic and hierarchical.
00:01:08
And they have up to six different management layers. And each level has to approve significant investments. Silicon Valley companies basically have the entrepreneur and a skeleton crew and these decisions about which technology people should back are taken very quickly. There is also no infighting and political opposition to ideas.
00:01:29
>> Advances in technology are forcing car makers 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.