DaimlerChrysler briefs German staff on job cuts
29 September 2005, STUTTGART, GERMANY - DaimlerChrysler told workers Thursday at its German Mercedes car assembly plants in Stuttgart and Bremen to stand by for massive job cuts in the next few months, with one fifth of the Bremen workers made redundant.
29 September 2005
STUTTGART, GERMANY - DaimlerChrysler told workers Thursday at its German Mercedes car assembly plants in Stuttgart and Bremen to stand by for massive job cuts in the next few months, with one fifth of the Bremen workers made redundant.
The German-U.S. automotive company said Wednesday it had set aside EUR 950 million in severance or retirement pay to shed 8,500 employees. The sum averages EUR 110,000 for each, but could approach EUR 250,000 for long-serving engineers.
The main car assembly plant in the Stuttgart suburb of Sindelfingen is to lose 3,100 of its 31,100 staff, while that in Bremen will lose 2,700 of 13,400 existing staff. The rest of the cuts will be at axle and engine plant and in the sales organization.
Eyewitnesses said Mercedes Car Group staff appeared calm as the designated new chief executive of DaimlerChrysler, Dieter Zetsche, 53, told a works meeting at Sindelfingen why the cuts were needed.
He said the cost of the 93,000-strong German workforce at Mercedes Car Group, which includes the factories, the sales chain and the micro-car manufacturer Smart, was far above that at competitors.
Though Zetsche is not set to take charge till January 1, he has visibly taken charge already from outgoing CEO Juergen Schrempp, 60, who promised last year there would be no sackings for eight years.
Financial analysts said that promise had been a mistake by Schrempp that was now costing DaimlerChrysler dearly, since staff had to be bought out of jobs with money and could not be forced to go.
"It's hard to understand why the cuts were not included in the package back then," said analyst Michael Raab at Sal. Oppenheim.
Juergen Pieper of Bankhaus Metzler agreed: "They've made some misjudgements in the past, probably in the belief that things were bound to get better."
Porsche, where humming sales have kept jobs safe and pay generous, meanwhile shored up its minority stake in volume producer Volkswagen.
Without saying where it had bought the shares, the Stuttgart-based maker of sports utility vehicles and sports cars said it had obtained 10.26 per cent of Volkswagen voting stock. Its target, of 20 per cent of Volkswagen, is expected to cost EUR 3 billion.
Porsche chief executive Wendelin Wiedeking has described the acquisition as strategic, since the two companies jointly make their big SUV and Porsche does not want Volkswagen to be taken over by non- German interests.
Subject: German news