360 DEGREES: Positive figures of this kind are a good excuse to rest on one's laurels...

Zetsche: No, we wouldn't be content to leave it at that. We're continuing to invest large amounts of money in technologies that are particularly environmentally friendly, such as the fuel cell. What's more, in the future every vehicle we develop will be able to accommodate a hybrid module. We aim to make our gasoline engines even more fuel-efficient by, for example, improving our direct injection systems. And we are working to make our diesel engines much cleaner. Thanks to our BLUETEC technology, we are the world leader in this field.

360 DEGREES: This clean diesel technology is already available in the U.S. When will it be offered with passenger cars in Europe?

Zetsche: Unfortunately, the low-sulfur diesel fuel that is a prerequisite for our clean BLUETEC technology is not yet available throughout Europe. In addition, this technology must be adjusted to meet the requirements of European customers. For example, it must be able to cope with sustained high-speed driving on highways. In 2008 we will initially offer BLUETEC in the E Class. That's a big step forward in environmental terms, because it fulfills European Union emission standards that won't actually go into effect until the fall of 2009.

360 DEGREES: Which argument for fuel-efficient vehicles do you consider more convincing – climate protection or the foreseeable end of cheap oil?

Zetsche: Both are good arguments, and they don't contradict each other. However, I think the only way we can reduce carbon dioxide is with a comprehensive solution that goes beyond automobile production. Other adjustment mechanisms include driver behavior, improved roads, new biofuels and the avoidance of traffic congestion. The efficient use of oil, a finite resource, play an important role in our strategies for the future. Naturally, we don't know exactly how long oil will be available at today's prices. But in any case, we have to find solutions for the period beyond. As an engineer, I'm confident that we will develop the necessary technical solutions.

360 DEGREES: We are currently witnessing a very lively public debate about global climate change. What do you think of the way it is being conducted?

Zetsche: Basically, this discussion is justified and important. And the idea that lower CO2 emissions means less interference with the climate is a good starting point for our actions. However, I cannot accept the stereotype of the U.S. as a country that only wastes energy and pollutes the atmosphere. This overlooks the important air purity standards and technical innovations, such as the catalytic converter, that have come from California. In recent years, huge efficiency increases have been achieved through technological innovations that originated in the United States as well. But I also think it's indisputable that if we wish to achieve a global agreement on climate protection to follow up on the Kyoto Protocol, it's essential to involve the U.S. and, at a minimum, the big threshold and developing nations. Instead of harboring prejudices about one another, we should learn from one another.

360 DEGREES: As a loss maker, the smart was unpopular at the Group for a long time. Has it now become your ecologically friendly hope for the future?

Zetsche: We're going to work hard on further enhancing the smart fortwo. I'm convinced that our concept for a small, fuel-efficient city car is the right one. smart is also doing well economically. This year smart will break even, and in the coming years it will post substantial profits. The CDI generates only 88 grams of carbon dioxide per kilometer, making it the world champion when it comes to low CO2 emissions. That's another reason why we're proud to have the smart in our portfolio. But we're still not satisfied with what we've achieved so far. A newly developed starter generator will decrease the gasoline-powered smart's fuel consumption by an additional five to 12 percent, depending on individual driving profiles.

360 DEGREES: What's the point of having written regulations in which companies commit themselves to transparency, respect and honesty? Wouldn't it be enough to simply set a good example of these values in practice?

Zetsche: Of course, management must set the example. But in a company as large as ours we also need clear ethical guidelines that are known to everyone. That's in addition to employee training sessions to ensure that each individual is correctly interpreting the rules. Finally, we also need controls to make sure that we comply with our code of behavior. That's why we've established a worldwide organization to monitor, for example, our compliance with anti-corruption regulations. We've set an ambitious goal for ourselves: Our Group aims to be a leader in transparency. In concrete terms, this means that we aim to set up the best organization in the industry for complying with and monitoring ethical guidelines.

360 DEGREES: What is your reaction to the negative public image of top managers in the wake of so many corporate scandals?

Zetsche: There's no way to gloss over these scandals. They have damaged the entire profession's reputation. But I don't think that people should vilify entire groups of people, most of whom are working hard and pursuing positive goals. Then again, some of the criticisms are based on misunderstandings. When managers reduce personnel, you can't write that off in a general way as unethical behavior. It often requires a greater sense of responsibility to make a difficult decision in a timely manner than it does to simply avoid it.

360 DEGREES: Referring to the recent job cuts, you said that some people have to be made redundant in order to save the jobs of the majority. But doesn't the mere announcement of a wave of job cuts generate fear among the employees?

Zetsche: Our employees' biggest fear was the fact that Mercedes was losing money. And the rapid return of success has done more than anything else to restore the workforce's confidence. Of course every job termination is a difficult process. That's why transparency is so important here. I'm personally willing to enter into discussions with the people who are affected so that I can clearly explain the causes and consequences of these decisions. If personnel reductions are unavoidable, they must be structured in a way that is fair to the individuals who are affected, for example by offering them attractive financial compensation. We have obviously conducted this reduction process fairly; otherwise there would have been more discussion.

360 DEGREES: Does a company like Daimler really have to get involved in social and cultural projects outside of is business operations? Wouldn't it be more honest to concentrate on just doing business in accordance with the company's own sense of its social and economic responsibility?

Zetsche: Companies are obviously a part of society. They create jobs, pay taxes and provide essential products and services, thus making important contributions to social stability. But our social involvement should go beyond these functions, especially in areas that are related to our specific interests. Take safety, for instance. Because we assign a top priority to the safety of our vehicles, it also makes sense for us to be committed to safe driving in ways that are not directly related to our products – for example, by offering training courses to many thousands of people. That reflects our commitment to protecting human life, our highest value.