On November 20, 2016, Rainer Grtner, chief executive officer (CEO) of Daimler Trucks and Buses China Ltd.

On November 20, 2016, Rainer Gärtner, chief executive officer

(CEO) of Daimler Trucks and Buses China Ltd. (DTBC), the Chinese heavy-duty segment of multinational automobile manufacturer Daimler AG (Daimler), found himself sitting in a police station in Beijing, China. The police officers had taken him in for questioning after a heated quarrel in a parking lot where he allegedly lost his temper over a parking space. 2 Gärtner and a Chinese driver were both trying to park their cars at the same time in the same space. This resulted in Gärtner screaming racially loaded insults. Onlookers tried to intervene, and Gärtner used pepper spray. One bystander got injured and had to be treated in the hospital for eye injuries. 3 How did it all happen? How did a seemingly small frustration get out of control and turn into such an ugly story? What on earth had happened to Gärtner? Chinese social media soon connected this incident with Daimler’s corporate culture and asked people to boycott Mercedes cars. The story went viral and was picked up by mainstream news outlets around the world. Against general upward market trends, Daimler’s share price weakened. What options did Daimler have to remedy the situation?

Gärtner’s Background Until that Sunday morning in November 2016, everything was going perfectly fine for Gärtner. His career was on a smooth and rather steep trajectory; his life was full of achievements.

He received his Master of Business Administration degree with a focus on exports, sales, and marketing from the Ludwig Maximilian University in Munich (Germany), followed by a Doctor of Philosophy degree in economics from the same university in 1997. Besides his native German, he spoke English, Spanish, and Turkish. 4 Gärtner’s employer, Daimler’s business unit Mercedes-Benz Cars in Germany, entrusted him with increasing responsibilities.

From 2004 to 2010, he was a senior manager with the Mercedes-

Benz Guard division. In this role, he was responsible for product management and worldwide sales, marketing, and service operations for armoured cars at headquarters in Stuttgart, Germany.

In 2010, Gärtner was sent on an expatriate assignment to South Korea. Daimler was paying great attention to the fast-growing Korean market, which reached a whopping growth in new imported car registrations of 25.5 per cent over the previous year. Moreover, 71 per cent of foreign cars sold in South Korea that year came from Germany. Gärtner’s initial position in South Korea was head of sales and marketing, Daimler Trucks Korea Ltd., from which he soon made it to vice- president of commercial vehicle sales.

In 2013, he was invited into a high-potential program, with sessions on leadership and self-development at the International Institute for Management Development (IMD). The next promotion came in December 2013 all the way up to the position of CEO of Daimler Trucks Korea Ltd. In this role, he had full profit and loss responsibility for new vehicle sales (trucks, buses, and vans) and after-sales (parts and accessories). He was further responsible for managing the supply chain production network of local and regional suppliers.

Move to China In July 2015, another move was waiting for Gärtner, then age 49, both geographically from South Korea to China, as well as once more up the corporate ladder. Gärtner was to succeed Robert Veit as CEO of DTBC. Veit, at age 47, was returning to Stuttgart headquarters in Germany to take the position of director of Mercedes-Benz Truck Overseas. 5 This latest promotion clearly underscored Daimler’s confidence in Gärtner. China was the largest vehicle market in the world. And for Daimler’s Mercedes-Benz trucks, China was already the fifth-largest market in 2012, with a market share of more than 50 per cent in the premium segment. 6 In the heavy-duty segment, Daimler solidified its position as the leader in the market. As of 2013, the trucks and buses division of DTBC pursued a twopronged strategy. For the division’s premium segment, the legally independent company DTBC imported and sold Mercedes-Benz trucks. For the volume segment, Daimler and Beiqi-Foton Motor Co., Ltd. (Foton), a Chinese truck manufacturer, entered in a 50/50 joint venture as part of the Beijing Foton Daimler Automotive Co., Ltd. Since July 2012, they had been collaborating to manufacture and distribute the medium- and heavy-duty trucks of the Auman brand, primarily for the domestic Chinese market. 7 The joint venture was intended to bring a stronger presence for the company by combining Daimler’s leading truck manufacturing expertise with Foton’s understanding of the domestic market.

Gärtner had full profit and loss responsibility for DTBC, including new vehicle sales (trucks, special trucks, and buses), powertrain components, after-sales (genuine parts, lubricants, and accessories), and telematics solutions for bus-specific fleet management.⁸

The Dispute Life in China was not bad for Gärtner. He stayed in a gated community in the up-and-coming district of Shunyi, a popular residential suburb in Northeast Beijing, among other overseas executives. Gärtner had a nice house with a little garden and fence around it, and a showy black Mercedes car in his driveway.
However, something inexplicable happened on Sunday morning, November 20, 2016. Gärtner was trying to park his car in a parking lot inside his residential compound, and a Chinese driver was trying to do the same thing, at the same time and in the same space. Apparently, one of the two “stole”
the parking space from the other, starting a frustrated dispute that quickly heated up. Gärtner allegedly yelled “I’ve been in China for a year and the first thing that I learned was that all Chinese are bastards,”9 and defended his parking space with pepper spray. One onlooker was injured and had to be treated in the hospital for eye injuries. This incident landed Gärtner in a Chinese police station........¹⁰

Question 1. Rainer Gartner’s racial tirade not only led to a firestorm on social and mainstream media around the world, but also sent Daimler’s share price on a downhill journey. What should Daimler do now?
2. Can Daimler fire Gartner? What is the legal situation?
Is it ethical to fire him?

3. A seemingly small quarrel about a parking space started Gartner on an aggressive tirade. Why was this the last straw? What could have caused Gartner’s frustration?
4. How can companies prepare their expatriates and international sojourners to prevent such dire situations?