Mercedes plans to cut more than 1 thousand jobs

Mercedes plans to cut more than 1 thousand jobs

November 10, 2019 0 By autotimesnews

The German company is calculating savings options as part of a cost-cutting program.

Due to reviews, costly fines for illegal diesel engine software and a slowdown in the global market, Daimler is launching an austerity program that, if implemented, will reduce 10 percent of its management jobs (1,100 posts) and freeze 300,000 salaries of workers in Germany.

Relevant data was published by the German newspaper Süddeutsche Zeitung, citing an email sent to staff by the group’s working council. The news was confirmed by Handelsblatt and the German news agency DPA.

Daimler declined to confirm the cuts, which are reported to be announced by CEO Ola Callenius in London on Thursday. It is reported that Callenius will also ask German workers not to demand higher wages, as the automaker is struggling with tensions in world trade, requires expensive reviews and a huge fine imposed by the German authorities for fraud in checking emissions.

The company allocated € 2.6 billion to cover diesel costs in the first half of 2019 after the German KBA regulator ordered the recall of 60,000 GLK models, claiming that the cars used illegal engine software. However, he refused to analyze in detail how much of the amount was allocated for recall, updating and possible fines and legal proceedings. Moreover, in the second quarter, the company suffered a net loss of € 1.2 billion ($ 1.3 billion), which was its first three-month loss in 10 years.

This news was not well received by his staff. Michael Brecht, Chairman of the General Production Council and member of the Daimler Supervisory Board, was adamant that these measures would not be taken: “This requirement rightly evokes emotions and a high level of misunderstanding,” – he said. And although he acknowledges that cost reduction is inevitable, he believes that Callenius’s proposals are disproportionate to the financial situation of the company and, therefore, reject them “categorically”. Callenius and Brecht were negotiating, but could not come to an agreement.