Mercedes-Benz Reportedly Planning to Cut Management, Freeze Wages

Reports have come in from Germany that Mercedes-Benz has decided to reduce its management staff by around 10 percent globally. On Friday, German newspaper Suddeutsche Zeitung wrote that Daimler CEO Ola Källenius wishes to delete around 1,100 management posts while freezing wages for all 300,000 German employees — citing internal documents from the automaker’s works council.

Handelsblatt also said it intercepted a copy of the letter, with both outlets claiming Daimler would elaborate further on the plan this Thursday. While Mercedes said it couldn’t comment on the matter, its restructuring push was no secret, even before Källenius took over as chairman in May.

Daimler lost 1.2 billion euros ($1.3 billion) in the second quarter while incurring penalties related to diesel vehicles and Takata airbag recalls. The automaker finds itself under investigation in Germany and the U.S. for emissions cheating, with civil lawsuits causing additional headaches. It estimates it is confronting around 4.2 billion euros in one-time charges related to the problems.

Handelsblatt reports that employees feel those issues shouldn’t be brought to their doorstep by way of a wage freeze. They are also concerned that Mercedes’ electrification efforts will encourage it to continue outsourcing suppliers, leaving its German workforce with less to do.

At the very least, Daimler’s mobility programs have been adding to the cost of doing business. Development fees are high across the industry and the trade war has created supply issues with Mercedes facilities in Tuscaloosa, Aguascalientes, and Charleston.

“The transformation of our industry keeps us all in suspense,” wrote the works council. “Our employees also feel the pressure of management and increasingly discuss the question of imminent personnel measures in production halls and offices.”

[Image: Daimler AG]