0la kallenius, in stuttgart, welcome to hardtalk, and let me begin with a simple question. this is bbc news, the headlines: what impact is this terrible coronavirus crisis having on your business? the british government has said stephen, thank you for all parts of the country are now on an "emergency footing" and it inviting me to hardtalk. could be six months before life in the uk returns to "normal" — this is a most unusual and very almost 1,300 people have now died from coronavirus in the uk — challenging situation for our industry. we at daimler are focused on two main priorities a rise of 209. as we are tackling this challenge. first and foremost is the health and safety of our employees around in the us — the leading infectious diseases expert has the world, taking measures warned that up to 200,000 in accordance with the authorities, people could die starting in china a couple of months from the coronavirus. ago, but now also in europe president trump says the us is carrying 100,000 virus tests and in the united states, taking a day, which accounts for the high measures to protect our staff, and also help authorities and societies to flatten this curve numbers testing positive. of this pandemic. in spain, another 838 people have died from covid—19 — the country's highest daily number of deaths. 6,500 people have now died from the virus there, and there are just under 80,000 confirmed infections. and of course, second, spanish health officials say it's the health of the company, the virus there could be so taking measures to protect our near its peak. cash, managing our cash, throughout this most unusual of times. let's start with the human elements.

i think i'm right in saying that you have roughly 200,000 workers now on bbc news, hardtalk. across the world. how many of those people are currently working? stephen, it's even more than that. welcome to hardtalk, i'm stephen sackur. every day, the havoc wrought by the coronavirus pandemic worsens, on public health and on the global economy. economic activity beyond the barest of essentials has been frozen across much of the world. we're actually 300,000, and it's what on earth will the economic different from country to country. landscape look like when this is over? in february we stopped our production operations in china for a couple more weeks, to then start gradually ramping up again. we have just announced this past week that we're stopping production in most of our european operations, and also some of our north american operations. so tens of thousands of people well, my guest is 0la kallenius, at the moment are at home, the ceo of one of europe's biggest but also a large part vehicle manufacturers, daimler. what will it take to survive the greatest economic shock in most of our lifetimes? 00:01:48,841 --> 4294966103:13:29,430 theme music plays. of the company is still working.

are you paying those members of staff who are not working? this is an issue across the world now, of what happens to workers who are laid off as a result of this pandemic. what are you doing? there are different regulations with regard to this around the world. here in germany, there is a model that has worked quite well for the economy here. it's a law called short working, where you can send people home for reasons of lack of demand or things like this very unusual situation, and the government pays for part of the cost of the wages, and we pay for the rest. you are one of europe's, one of the world's, most famous, lauded, historical manufacturing companies. now, companies like yours are being asked by governments around the world to do some pretty extraordinary things, for example, to give over some of your engineering and assembly capacity, to shift from making in your case cars to making ventilators. are you prepared to do that?

we are taking a range of actions to help. this is one of the situations where everybody needs to come together and see what we can do to tackle this crisis. and yes, we are helping on many fronts. of course we are donating money. we have donated 110,000 of the masks that we would normally use in our paint shops and in other parts of the operations. even to what you are mentioning, we have had the first request for making individual components, and we have quite a capable 3d printing operation, and some prototype parts are being made as we speak. so, if and where we can help, we're very happy to do so. let's talk about the financial state your company is in. we all know that the car industry has been under very heavy economic pressure, long before the coronavirus struck, and i believe i'm right in saying that in the last quarter, daimler actually made a loss, something almost unprecedented in your company. you are in a very weak position, are you not, to withstand

the new pressures that come with this crisis. the auto industry as a whole is in transformation, a fundamental transformation, where you could almost argue that we're at the point in time where we have to reinvent the original invention that was from the founding fathers of daimler. we're about moving towards c02—free mobility. the digital revolution changes our products, and also the way we work. so yes, you could argue we are turning the company upside down. with regard to our financial results, we have taken measures to strengthen our balance sheet and our profitability. let us be honest. are you now in a battle for survival at daimler? at this stage, we are not in a battle for survival. we have a strong growth liquidity position, and of course, now we're adjusting our production capacities to meet a period of lower demand which is caused by the covid—19 pandemic.

so we are very carefully managing cash. at the same time, it's uncertain how long this crisis will go on. and of course, at some point the industry as a whole, as well as our company, we have to try to get back up again to normal operations, and generate more revenue. yes, i understand your wish and your desire, but let's look at reality. investors are losing confidence in your future, it seems. i note that your share price, before recovering a little bit in the last couple of days, your share price has sunk over 40% since this coronavirus crisis really hit home. investors are losing confidence.

the whole sector, and other industries as well, have been hit very hard on this very volatile and uncertain financial market. so we have had some big swings in the last couple of days, as you mentioned. it went back up again, unusually high. i think that is a reflection of the uncertainty. how long is the pandemic going to go on? when can the economy pick back up again? so it's not something that is specific to daimler. but, in a situation like this, it's our task to manage our business, manage the cash, and make sure that we navigate through this crisis in the best possible way, and that's what we're focusing on. some fundamental weaknesses, it seems to me, have been exposed in your business model in the last couple of months, not least your massive and growing reliance on china and the chinese market. you sell more cars by value to china than you do in germany and the us

combined, and that has really hurt you as the coronavirus effectively closed down much of the chinese economy from the beginning of this year. can you learn from that? over the last 5—10 years, china has been an absolute success story for us, and yes, we have grown significantly, to the point where china now by a wide margin is our biggest market. as the corona outbreak started, and measures were taken in china, of course we ramped down production and demand fell away, but it's also the first country where we can now see a gradual return to some sort of normalcy. in our production, in our operations in china, we're almost back up to normal production, and showroom traffic is starting to pick back up.

so it could even be an opportunity as europe and the united states now, some couple of months later, hit this crisis, that we can gain revenues in china. so in general, the reliance of china is also an opportunity, notjust through a situation like this, but also for the future. well, to be honest, that sounds like you're not learning any lessons at all from what has happened to you over the last three months. do you really want to go forward with china being so utterly central to your entire business plan? i know it's the biggest consumer market in the world for you, but surely you have learned something about the fragility of your model. china is the biggest automotive market in the world, by a large distance to number two, which is the united states. if you're a global player,

in our case the leading premium and luxury player in the world, not to focus on china as a growth market i think would be a strategic mistake. so of course, this black swan, the covid—19 crisis, has exposed global supply chains being dependent on each other. in this situation, our procurement and supply team has actually mastered this very well to make sure that where we could keep operations going, we could also have the supply secured. to turn away from china this point, which we also feel in the next ten years provides the biggest opportunity for growth, i believe would be a mistake. we're going to increase our activities in china and try to grow there. that doesn't mean that other markets are not important for us, of course europe and the united states, and other places around the world. we will also seek growth. but we're not ruling out one region as a strategic priority, just because it happens to be a bigger leading market. mr kallenius, let me

ask you about germany. let me quote to you your chancellor, angela merkel. since german reunification — then she corrected herself and said no, since the second world war — there has been no challenge to our nation that has demanded such a degree of common and united action. when you look at germany right now, do you believe you're seeing a response from the government which meets the scale of the challenge? the response from the german government has been comprehensive, and in my view a good and measured response. what we need is a combination of solidarity and flexibility. solidarity in terms of taking all the measures that need to be taken to flatten this curve, everything from social distancing to making sure that we have all the equipment and everything

that is needed to tackle this medical crisis. but also flexibility, in the economy, for the companies. yes, we are ramping down production now, but we also need to be ready when we come out on the other side to go back up again. and especially, as i mentioned before, the law of short working, that you can quickly take out capacity without having to lay off people, to then be able to turn it back on again, is i think something that is perhaps even unique for germany, and is a good tool that the government has given industry in this situation. so the country is pulling together, and we're in a constant dialogue how to manage this very delicate crisis. we are used to germany being literally the engine, the motor of economic growth in europe, economic stability. that looks as though it is going to be challenged. to quote the president of the ifo institute, clemens fuest, who hasjust released figures suggesting a collapse in economic activity

in germany in the last month, quote, the german economy is speeding into recession. there are leading economists who think the country's gdp for this year could contract by a 29%. as one of germany's signature companies, businesses, you must accept that this is an environment in which your company is not going to be immune, is facing a profound crisis. there's no doubt that this challenge is twofold, both a medical one and an economical one. that is why we took such quick action with regard to matching our production capacities with the demand situation that we are now seeing in the market, really managing cash. and i think it's absolutely crucial as these things unravel that we watch when can we turn back on again?

how can that be done in a responsible way? that is being discussed now, but i think it is maybe a bit too early to make a final prediction of where this is going to go. let us compare and contrast europe and the united states. across europe, from your own situation in germany, where the regions and the government are, in essence, operating a form of lockdown, not entire, but a lockdown, to italy and france and spain, where the lockdown is complete. we see in europe a very dramatic and indefinite freeze of economic activity, but then we contrast that with donald trump's message to the american people where he says, "i want america to be back open for business, people back to work", he says by easter, which is mid—april. now, which approach do you believe

is the right approach? in the european situation, i think the situation is being managed day—by—day. so, at this point, we don't know when you can responsibly start picking up activity again, so there's not an exact timeframe on that. we've seen in the united states, many citizens, many regions are acting in a similar way to europe, but also keeping economic activity down the road in the back of our minds. what will have to do over the next few weeks is really to calibrate this. how can the covid—19 curve be flattened so that the health systems can cope with it? and then be able to, step—by—step, turn the economy back on again. if i may interrupt... sorry, you're being very measured, you're giving me a very dispassionate answer, but ultimately this is about an emotional as well as a logical reaction.

donald trump says there is a danger that the cure, i.e. total lockdown, is worse than the disease, and he sort of implies in the end of societies is how to sacrifice a little bit, maybe the lives of some of the older and more vulnerable people in society, to ensure the economy can keep going, that masses... millions of people have work to do, that they do not go hungry, and that society continues to function. where do you, as a business leader, sit on that argument? do you any sympathy with donald trump? for us, as i said, two priorities — health and safety of our employees but also the health of the company. that's why we are also going through a balancing act. we have not turned off

the company completely, we have stopped many of our production operations and we've stopped also many of our administrative operations, but most of our r&d is still going. we are of course taking measures, we are dividing development teams into two groups. even the board of the company has been divided into two groups. as we are navigating through this crisis, we are trying to do both. it's a balancing act and i don't think it's a situation where it's either/or and i think everybody realises, including the politicians in europe, that the economy is important and that in a responsible way we are looking for a scenario as to how to get back up again and into operations, as we can see happening in china at the moment. you told me earlier that right now you don't feel this is a battle for daimler‘s survival, but it could come so.

we don't know how long europe and the united states are going to be in the midst of this crisis, we don't know how deep the recession/economic depression that comes as a result of this economic shock is going to be, but there are clearly people in germany who are extremely worried. there are ministers in your government who are saying," we may lose some of our greatest and best businesses, and we will, if necessary intervene to do whatever it takes to ensure they are not sold off cheap to foreign interests. we are, and i'm quoting now the justice minister speaking just recently, "we are prepared to take national stakes in these businesses, partial or full stakes, if necessa ry". could that happen to you? well, the first thing that needs to happen, and action has been taken here, is when you lose the revenue side for a period, for some companies, and this is very

important for our supply base down to the tier two, three and four, is to provide liquidity and credit. this is happening in an unbureaucratic way so that companies have access to liquidity. that is the first port of call in this management of the crisis. in our own case, being a company with a healthy gross liquidity, of course we are managing our cash, so we are now adapting our production to meet demand and looking at every expenditure in the company to make sure we can weather this storm. it's too early now to say how long it can be. can something like that go on indefinitely? no, it can't, but as we sit here today i don't want to speculate about what the world looks like in six months from now but rather focus on the next weeks, months to manage this as best as we can and be in an open dialogue with government as to how we can turn the economy back on again.

but put it this way, is it conceivable to you that if the crisis goes in the worst way, worst—case scenario, is it conceivable to you that daimler could be nationalised ? it's not a scenario we're discussing at this stage, and i don't want to do hypothetical here. what we're doing is protecting our liquidity and our cash position to make sure that we we best possible navigate through this very challenging crisis. just a quick thought about lessons to learn. some people are saying the disastrous consequence of this is companies like yours, which are trying to spend a huge amount of your r&d on electrification, creating a new wave of electric cars, you're not going to do that, you're going to have to withdraw a lot of that investment and actually you're going to lose out in the long run because innovation and electrification will have to take a backseat.

we are on a journey towards a c02 neutral mobility, and we've set as an ambition for the company to, across—the—boa rd over the next couple of decades, to go c02 neutral. that is a strategic decision that won't change. all our r&d projects, as we sit here today, are alive and on track. of course will monitor the situation and how deep this crisis goes and manage our cash accordingly, but it doesn't change the strategic direction and we're doing everything we can to protect this seed for the future, if you will, as we managing through this crisis. a final thought. you're one of the most global companies one could imagine, your supply chains, your markets, they're all over the world, they rely on an open, interconnected world. globalisation is under real threat. it may never be the same again

after this coronavirus pandemic. that is perhaps your biggest problem of all. globalisation for the past decades for the world but also companies, or industries, companies like ours, industries like the auto industry, has been a big and if it. it's created growth, it's created jobs, and it's created also financial strength so we can invest into these huge technologies we were talking about, so we are a strong promote, proponent of keeping the system of global and open trade alive. now, the covid—19 crisis has been an absolute stress test for these global supply chains and has been an unwelcome opportunity for us to see how they work. i've been absolutely amazed at how well across countries, from china to europe to the united states and many other countries, we've been able to manage the supply chains. that doesn't mean we're going to sit back and not have some lessons learned from this crisis. we will look at where we need to make supply chains more robust. but i want to underline — we are a company that fully supports and thinks it's best for everybody if we keep the globalist idea alive. and who knows, maybe we can say they view business trips

now that we know that digital tools, videoconferencing and other tools work well for many meetings as well. 0la kallenius, this particular digital connection has to end right there, but thank you very much forgejoining me on hardtalk from stuttgart.

hello there. through the first half of last week we had some spring warmth. in fact, last tuesday, temperatures got up as high as 19 degrees. this week, starting on a much colder note. certainly during sunday temperatures for most of us didn't get out of single digits. and we start monday morning with those temperatures around about freezing. high pressure in charge of the scene, a strong area of high pressure out to the west. this really has been dominating our weather for the last couple of days, feeding winds in from the north. we've had really strong winds through the weekend, the wind easing a touch during monday and some notice also some slightly lighter colours of blue coming into the mix,

just signs the air might not be quite as cold as it has been. now, having said that, still chilly on monday, a brisk breeze and some showers across northern and eastern areas across the midlands and even into wales through the day. any wintriness in the showers becoming confined to the very highest ground in the north with that air turning a little bit less cold. we will see a fairly brisk breeze but not as windy as it was, say, during sunday. and those temperatures justa notch up, 9,10, 11 degrees, although that is still a little below par for this time of year. now, as we go through monday night we'll continue to see large areas of cloud feeding down from the north, we'll see some clear spells as well, one or two showers here and there and as you can see from the green shades on the chart, yes, it will be a chilly night but most places will probably hover just above freezing. so, a change in the feel of the weather into tuesday. 0ur area high pressure sinks a little bit further south and that allows us to draw the air in from the atlantic. it cuts off that flow of air from the north, so it's not going to be quite as cold with this west or north—westerly wind toppling in.

still a lot of cloud, some spells of sunshine, one or two showers, but those temperatures up to nine or 10 degrees. now, as we move into wednesday, for northern ireland, for england and wales, it's a similar sort of day. large areas of cloud, some sunny spells but we will see a frontal system in bringing some showery rain into northern parts of scotland. the winds starting to pick up here once again but those temperatures again just a touch higher at ten or 11 degrees. now, for the end of the week, some changes. 0ur area of high pressure slips away south—westwards, a low pressure dives in from the north, another frontal system into scotland, rain and snow with that, another shot of cold air for the north of the uk but for the south of the uk, it looks like it will stay that bit milder. so, to sum up through the week ahead, a chilly start, some rain and snow, particularly in the north, a lot of dry weather as well but it should turn milder from the south later.

hello. this is bbc news. i'm simon pusey with the latest headlines for viewers in the uk

and around the world. almost 1,300 people have now died from coronavirus in the uk, a rise of 209. deserted roads and empty parks — a top official says the uk could face up to six months of restrictions. over time, probably over the next six months, we will have a three—week review, we will see where we're going. we will need to keep the lid on, and then gradually we will be able to hopefully adjust some of the social distancing measures. in the us — a prediction from the leading government expert that coronavirus could kill up to 200,000 americans with a peak in around a fortnight. for the next two weeks, and during