November 27, 2008 / 6:50 PM / 11 years ago

Daimler may cut work week at four German sites

FRANKFURT (Reuters) - Roughly 50,000 Daimler (DAIGn.DE) staff face a shorter working week from January as slumping demand hits European carmakers.

People walk around a Daimler SL 500 car during Daimler's annual shareholder meeting in Berlin April 9, 2008. REUTERS/Fabrizio Bensch

The car and truck maker said on Thursday it would talk to unions about potentially reducing working hours at four German Mercedes-Benz assembly plants from the start of the year through the end of April, leaving the German federal labour agency to make up any wage shortfalls.

Carmakers across Europe and the United States are bearing the brunt of the economic downturn and their production cuts are being felt in other industries.

The world’s largest steelmaker Arcelor Mittal ISPA.AS MTP.PA said it planned to cut up to 9,000 largely white collar jobs, around two thirds in Europe.

The world’s largest chemicals maker by revenue BASF AG BASF.DE lowered its 2008 profit target for the second time in two months due in part to lower demand from the auto sector. A Daimler spokeswoman said the working week at the four plants would fall below the 30 hour threshold set out in its current union agreement but could not say how many employees would be affected since this hinged on talks with the unions.

According to data published by Daimler, at least 47,000 are employed at the four production sites in Sindelfingen, Berlin, Bremen and Duesseldorf where the measure could go into effect.

The state aid is designed to ensure employees can at least retain their jobs. This so-called “Kurzarbeit” can only be resorted to in emergency cases and is expected to be temporary.

Two of the sites build all types of Mercedes-Benz cars except for the A-Class and B-Class family of compacts and the larger R-Class and its sports utility vehicles like the GL-Class and M-Class. The latter three are made in the United States.

Berlin manufactures components such as engines, while Sprinter delivery vans roll off the assembly line in Dresden.


The Mercedes-Benz model lines that could be affected had sales of nearly 725,000 vehicles in 2007, accounting for about 60 percent of the brand’s luxury car volume

Daimler employed nearly 167,000 in Germany at the end of last year.

Earlier this year its works council said production would be cut by far more than 80,000 units and management had identified a staff overhang of 5,800 employees at Mercedes-Benz.

Other carmakers are also battling to responded to the global economic crisis and resulting slump in car demand.

BMW (BMWG.DE) already planned to slash its permanent staff by 3,100 this year before the crisis broke out, while Volkswagen (VOWG.DE) has said it is considering suspending production at its Wolfsburg plant from December 18 to January 11. Its luxury brand Audi is considering similar measures.

Even sportscar maker Porsche (PSHG_p.DE) plans to close for several days before the end of January.

PSA Peugeot Citroen (PEUP.PA) is cutting up to 3,550 jobs across its sites in France.

GM Europe (GM.N) President Carl-Peter Forster has said he wants staff to accept at least a 10 percent cut in labour costs, while Ford Motor Co (F.N) plans to stop production for 21 days at its plant near Valencia in the first half of next year.

Editing by David Holmes

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