DaimlerChrysler unveilsdeal with union

23rd July 2004, Comments 0 comments

23 July 2004, STUTTGART - DaimlerChrysler promised its German car-plant employees Friday their jobs were safe until 2012 following union concessions that would cut personnel costs by EUR 500 million annually starting in 2007.

23 July 2004

STUTTGART - DaimlerChrysler promised its German car-plant employees Friday their jobs were safe until 2012 following union concessions that would cut personnel costs by EUR 500 million annually starting in 2007.

Chief executive Juergen Schrempp said the package of concessions over multiple details in labour agreements was "exemplary" for other German employers because it ensured the flexibility to work longer hours at times when there was more work to do.

Juergen Hubbert, chief executive of the Mercedes Car Group division, said savings on personnel costs meant the manufacturing cost of each standard Mercedes C-Class sedan would be reduced by EUR 500.

Germany's most powerful trade union, IG Metall, extracted a promise from DaimlerChrysler in the talks not to lay off any staff producing Mercedes, Smart and Maybach cars in the period to December 2011. The company will only be able to fire staff for bad behaviour.

Hubbert said that undertaking was possible because it matched the timescale when Mercedes intended to manufacture the next C-Class.

Stockmarkets initially welcomed the agreement, with DaimlerChrysler shares rising 1.13 percent, more sharply than the rest of the market, to EUR 36.62 shortly after the agreement was announced, but the gain later evaporated.

German Chancellor Gerhard Schroeder called the pact a "victory for reason" and said he hoped it would inspire success in similar labour- management talks at Germany's other big car group, Volkswagen.

Schrempp said he and other members of the executive board had offered to cut their own salaries by 10 percent. Some 3,000 other managers would be expected to make a "substantial contribution" to the savings programme, but terms would have to be negotiated.

The salaries of the executive board of the German-American automotive group totalled EUR 40.8 million in 2003, according to the published accounts.

Erich Klemm, the elected chief labour representative at the company, said the various concessions by his works council, which was advised by IG Metall during the talks, had been "painful".

The pact only affects 160,000 staff at German car plants, not those in the United States or the aerospace and other divisions of the firm.

Militant blue-collar workers will lose days off, but continue to work a 35-hour week, whereas 20,000 white-collar staff, including the German research and development section, will have working hours increased from 35 to 40 hours weekly.

An independent audit of the EUR 500 million in savings was not available, but both labour and management said it was an accurate costing. No assembly worker would earn less, but future raises would be moderated by changing the mathematics of the pay scale.

Benefits of work on robotised Mercedes assembly line are legendary, ranging from work breaks that still count as paid time to the opportunity to buy a brand-new, cut-price Mercedes car every year and sell it at a profit.

To back its demand for savings, DaimlerChrysler had earlier threatened to shift 6,000 jobs away from its sprawling main plant that employs 30,000 people near Stuttgart in southern Germany.

It said it wanted to take advantage of lower labour costs at its plants in Bremen, northern Germany and in East London, South Africa. The C-Class is to be manufactured at all three sites.

DPA

Subject: German news

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