Daimler Looks to Cut Thousands of Jobs
November 29 2019 - 10:20AM
Dow Jones News
By William Boston
BERLIN -- Daimler AG aims to slash thousands of jobs over the
next three years and cut labor costs by $1.5 billion, the latest
round of cost cuts in a sector squeezed between huge investment in
new technologies and falling demand for cars.
The announcement Friday by the maker of Mercedes-Benz luxury
cars caps weeks of negotiations with labor representatives. All
major German auto makers and their suppliers are now shedding staff
in the face of dwindling demand as economies slow in China, the
U.S. and Europe after years of robust growth.
Daimler, BMW AG, Audi AG, Volkswagen AG and big suppliers such
as Continental AG have announced tens of thousands of job cuts in
recent months. Continental is closing several plants, including its
factory in Newport News, VA.
The companies have blamed the slowing global economy, consumer
angst over Brexit and the U.S.-China trade wars for their woes. But
they primarily point to an expensive shift from internal combustion
engines to electric cars as manufacturers come under increasing
pressure to curb greenhouse- gas emissions.
Earlier this month, Daimler said it planned to cut 10% of its
global management ranks, affecting more than 1,000 jobs. Daimler
wouldn't put a number on the more far-reaching job cuts to its
global workforce, which stood at 298,683 employees at the end of
2018.
Under the plan, Daimler said it would try to avoid any forced
layoffs of full-time staff. Instead, the company will trim the
ranks of temporary workers and not replace workers who retire,
taking advantage of the large number of baby boomers reaching
retirement age. The company also said it planned to offer voluntary
severance packages and be more restrictive in awarding 40-hour
contracts to permanent employees.
"With the key points we now agreed with the works council to
streamline the company, we can achieve these goals by the end of
2022. We will make the measures as socially responsible as
possible," said Wilfried Porth, Daimler's board member in charge of
human resources, in a statement.
Under German labor laws, worker representatives have
considerable influence over decisions that directly affect the
staff. But many of the decisions that Daimler could take to reduce
labor costs might not require labor approval.
The works council, which represents the workforce in most
matters except wages, has agreed to the broad outline of the
restructuring plan but hasn't committed to any specific number of
jobs cuts, a spokesperson said.
Michael Brecht, the head of Daimler's works council, said in a
statement that management needed to come up with a clearer plan for
mastering the shift to electric.
"The workforce needs a clear and comprehensible strategy for
going forward," said Mr. Brecht. "A reduction of capacities must
not be born on the shoulders of the workforce."
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
November 29, 2019 10:05 ET (15:05 GMT)
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