DaimlerChrysler to cut staff in Mercedes division |
|
|
Published
:
Thu, 29 Sep 2005 06:05
|
FRANKFURT: Carmaker DaimlerChrysler intends to cut more than 8,500 jobs in its Mercedes car group division in Germany. The company, in a statement, admitted that there will be staff reduction and said the cuts will come through voluntary termination agreements over the next 12 months. This will result in charges of 950 million euros.
The company has an existing agreement with its works council, guaranteeing that there will be no job cuts in the company's German plants. In return, the work council agreed for labour concessions that will generate 500 million euros in annual savings from 2007. The agreement covered some 160,000 workers. As such the job cuts will have to come through voluntary retirements. DaimlerChrysler had some 385,000 workers on its rolls at the end of last year.
The Mercedes division had made an operating profit of 12 million euros in the second quarter. It had an operating loss in the first quarter. The division had faced issues like model changes, a strong euro, losses at minicar facility and quality problems. The division includes Mercedes-Benz, Smart minicar and luxury Maybach brands.
The company had in August brought former chief of Chrysler unit Dieter Zetsche to head the division, replacing Eckhard Cordes. He is tipped to become chief executive of DaimlerChrysler in 2006.
DaimlerChrysler is the latest company in Germany to react to the prevailing high labour costs in the country. Earlier, Volkswagen AG, Siemens AG and other German companies have cut labour costs in various ways. Wage costs in West Germany are the world's second-highest after Denmark.
Earlier this year, Munich-based Bayerische Motoren Werke AG (BMW), became the world's No 1 maker of luxury cars, edging out Mercedes Benz to the second position.
|
|
|
|
|
|
Print this Story
