Almost a year to the day after his unexpected ouster as CEO of Mercedes-Benz USA, Ernst Lieb has lost his bid to clear his name and get his job back.
The sudden departure by 57-year-old Lieb set off a flurry of rumors but was ultimately linked to what Mercedes claimed was the inappropriate use of company funds to pay for the renovation of his home near the sales subsidiary’s headquarters in New Jersey.
Back in Germany, Lieb challenged his dismissal, but a Stuttgart court sided with the automaker, declaring, “In the view of the court, the allegations against the plaintiff are so serious that any further employment [at Daimler] would be unacceptable.”
According to the Stuttgarter Zeitung, Lieb’s attorney plans to appeal the ruling and is hoping to repair the damage to his reputation.
The executive was considered one of the most capable of the CEO’s running a foreign-owned automaker prior to his unexpected ouster in November 2011. Initially, Mercedes officials declined to discuss the fracas but it eventually became clear that an ethics issue was behind Lieb’s forced departure.
Once the details came out, a spokesman for Mercedes’ parent Daimler AG contended that Lieb made “incomplete, inaccurate and manipulative” statements regarding expenses charged to the company.
He reportedly used more than $100,000 to upgrade his home in Mahwah, NJ, according to Automotive News, allegedly including such items as a home gym, a home theater and a built-in barbeque. For his part, Lieb has insisted that money went to repairs for the house, which the company had provided as part of his employment in the U.S.
Insiders tell TheDetroitBureau.com that Lieb was caught up in a situation that might have had a very different outcome earlier in his five-year tenure in the U.S. The carmaker was traditionally much more lax about executive expense accounts but was forced to crack down on all ethical issues following its settlement of global bribery charges in 2010.
Daimler was forced to pay $185 million for violating U.S. anti-corruption laws – using bribery to obtain business in 22 countries.
Following its settlement with the U.S. Department of Justice, the maker created a new position on its board of management to oversee “Integrity and Legal.” As a result, it shifted to a zero-tolerance approach on all ethical issues, including expense accounts.