In November, Daimler announced a restructuring plan that called for the elimination of 10,000 jobs, claiming the effort would result in an estimated 1.4 billion euros ($1.5 billion) in savings by the end of 2022. Chairman Ola Källenius may just be getting warmed up.
According to German outlet Handelsblatt, sources within the company claim austerity measures will be expanded at Tuesday’s investor conference. Källenius is said to raise the job cut figure to 15,000 while scaling back (or dropping) several side businesses that aren’t turning a profit. As well, the automaker will likely axe a few models that don’t fit in with the core brand’s luxury image, starting with the Nissan Navara Mercedes-Benz X-Class.
More details will arrive after tomorrow’s meeting, though Handelsblatt says to expect a cancellation of successors for the S-Class’ convertible and coupe variants. Meanwhile, the AMG CLS and GT will reportedly be “merged” into an singular electric performance coupe. Surely that won’t leave AMG fans in an uproar, especially not after the GT had its best sales year on record (by a huge margin) in 2019…
Most of the job cuts are expected to come by way of early retirement and juiced-up severance packages; however, there should also be programs to help some employees transition into part-time work. The number is less important than the savings, however. Daimler just wants to see how much higher it can push the €1.4 billion restructuring target.
As for side projects on the chopping block, the German paper only referenced the Lab1886 innovation center. The site is responsible for various mobility projects, or at least their inception. But most are profit-losing mobility programs, data management software, connected services and the like. Daimler is currently looking to offload its shares. We’ll see what other ugly growths Källenius wants to see shaved off the company’s back on Tuesday.
[Image: Daimler]
“……programs to help some employees transmission into part-time work….”.
Building transmissions, part time?
What bothers me about these kinds of cuts is that when they show a savings, the bosses get a bonus for saving the company.
Yeah, often the same bosses that got them in a jam in the first place.
On a positive note, there appear to be budding realizations that “mobility” is an 8-letter word with no profit attached.
Build quality vehicles and customers will come. Everyone knows to never own a German car out-of-warranty. If Daimler could change that perception, they could sell every car they make.
And, no, electrification is not going to save them.
Paraphrasing our CEO (SanDisk) who famously said “electrons are our friend”:
Electrons are not Germany’s friend. Maxwell’s equations and QED are not apprehended well by Germans either, especially when warranty expires, even though quantum theory was discovered single handedly by Germans. Go figure.
Daimler doesn’t sell every car they make? Are they crushing any of them?
Your point is….an improved reputation for long-term reliability would make it possible to *sell more* cars. That’s a corollary we’d all agree on.
I don’t know how they’re not selling enough cars. Hooterville here has a very high Negro population and you can’t look in any direction without seeing a Mercedes.
Suddenly…..it’s 1960!
In more ways than one, I might add.