Mercedes-Benz’s parent, Daimler has just announced that they will be axing 10,000 jobs over the next few years as the production costs of new generation technology cars are affecting the running costs at Mercedes-Benz. Why, well, the new generation of all electric cars is becoming very expensive to produce and even other car manufacturers who are moving aggressively into all electric cars are also having to retire a substantial number of employees as the move now and in the near future is to partner with technology, battery and IT companies to produce full electric cars. This means employees working with combustion engine technology and drivetrain parts are no longer needed.
Audi AG recently announced their move to retire 9,500 jobs to fund full electric car production also mentioned very similar reasons. Other car manufacturers will very soon be making similar announcements and this only means that now there are more than 19,500 people who will hate electric cars.
PRESS RELEASE: Daimler and the General Works Council have agreed on key points in order to streamline the Group structure and thus increase efficiency and flexibility. Therefore, measures to reduce costs and employment in a socially responsible manner have jointly been agreed upon. Daimler will, among other things, use natural fluctuation to reduce jobs. In addition, the possibilities for part-time retirement will be expanded and a severance program will be offered in Germany in order to reduce jobs in the administration. The implementation of this Key Points Agreement will be further developed with employee representatives in the coming weeks.
Daimler aims to cut thousands of jobs worldwide by the end of 2022. The agreed job protection in Germany until the end of 2029, which was promised and agreed upon in the spin-off of Mercedes-Benz Cars & Vans and Daimler Trucks & Buses, stays untouched for Daimler AG, Mercedes-Benz AG and Daimler Truck AG.
The automotive industry is in the middle of the biggest transformation in its history. The development towards CO2-neutral mobility requires large investments, which is why Daimler announced in the middle of November that it would launch a programme to increase competitiveness, innovation and investment strength. Part of this programme is to reduce staff costs by around € 1.4 billion by the end of 2022 and, among other things, to reduce the number of management positions worldwide by ten percent.
“With the key points we now agreed with the works council to streamline the company, we can achieve these goal by the end of 2022. We will make the measures as socially responsible as possible,” says Wilfried Porth, Member of the Board of Management of Daimler AG, Human Resources, Labour Director and Mercedes-Benz Vans.
In addition to the measures to streamline and right size the company, Daimler and the employee representatives also agreed to reduce further staff costs. Among other things, there will be offers to the workforce to reduce weekly working time. The company will extend expiring contracts for temporary workers in the administration very restrictively and will also be very restrictive in allowing 40-hour contracts for permanent employees.
