Print

Mail

wiki links

DaimlerChrysler confirms Mercedes job cuts in Germany

Automaker DaimlerChrysler AG said it will cut 8,500 jobs in Germany at its Mercedes Car Group in a bid to return the troubled brand to profitability.

The cuts will come through voluntary termination agreements over the next year and result in charges of euro 950 million (US$1.11 billion), the company said on Wednesday.

DaimlerChrysler, the world's fifth-largest car maker, said the charges will be posted in the fourth quarter and are not expected to hamper the company's outlook. The automaker had said previously that it expects to beat last's year operating profit of euro 5.8 billion (US$7 billion).

The announcement came after Dieter Zetsche, who took control of Mercedes this month and is set to become chief executive of DaimlerChrysler at the beginning of next year, outlined the plan to the company's supervisory board in the US earlier in the day.

The Mercedes division was once the pride of the company, and industry watchers are keen to see if Zetsche can invigorate it the way he did Chrysler, which posted its eighth straight quarterly operating profit in July.

The program will target workers at plants in Sindelfingen and Bremen, which produce the C-Class cars.

Works council spokesman Erich Klemm agreed that there was a surplus in the number of workers, but said no one would be forced to leave Mercedes under the terms of a deal signed last year. That agreement guarantees employment through 2011.

But it will be a bitter pill for Germany, which is suffering from 11.6 percent unemployment and almost no growth.

Earlier this week, Volkswagen AG said it would reduce its work force in western Germany from the 103,000 currently employed, offering early retirement packages and severance in the hope that employees would leave voluntarily. VW did not say how many jobs it was seeking to cut.

GM announced plans last year to cut as many as 10,000 jobs at Adam Opel in Germany. GM Chairman and CEO Rick Wagoner said this month at the Frankfurt auto show that the company is about halfway through that plan.
This story has been viewed 1694 times.