July 25, 2018 / 11:00 AM / in a month

Daimler's workers to defend jobs if tariffs force production shift

FRANKFURT (Reuters) - Daimler’s (DAIGn.DE) German workforce will seek to defend local jobs if the luxury carmaker attempts to shift some production to the United States in response to trade tariffs, supervisory board member Roman Zitzelsberger told Reuters.

FILE PHOTO: FILE PHOTO: The Mercedes-Benz logo is seen before the company's annual news conference in Stuttgart, Germany, February 4, 2016. REUTERS/Michaela Rehle/File Photo/File Photo

Carmakers across the globe are readying themselves for a new geopolitical order after U.S. President Donald Trump threatened China and the European Union with tariffs in a bid to protect American jobs.

“If this escalates into a trade war, and everybody hikes tariffs, then this would hit trade, production and employment,” Zitzelsberger, who is head of trade union IG Metall in the state of Baden-Wuerttemberg, told Reuters.

Trump has threatened to extend tariffs to cars and car parts imported from Europe in a step that could hurt the profits of German carmakers that export vehicles from both Europe and the United States.

“Some carmakers are very flexible and can produce several models in one factory, they have an advantage when it comes to making adjustments,” Zitzelsberger, also a member of Daimler’s board of directors, told Reuters.

BMW recently stopped exporting its x3 sports utility vehicle from Spartanburg, South Carolina, to China. The German carmaker plans instead to make the model in China and raise output there to a level exceeding Spartanburg’s capacity.

Labour representatives will watch any efforts to shift production away from Germany, to ensure that local jobs are not threatened.

“If this question is raised, we will not stand by and applaud, but will always try to defend employment and the manufacturing of certain models in Germany,” Zitzelsberger said.

German labour representatives command half of the seats on the board of directors and have the power to veto significant strategic decisions.

In the federal state of Baden-Wuerttemberg alone, which is home to carmakers Porsche [PSCH.UL], Mercedes-Benz, and suppliers Bosch [ROBG.UL] and Mahle [BEHR.UL], 440,000 jobs depend on the auto industry.

Tariffs between the U.S. and China have already hit Daimler, parent of the Mercedes-Benz brand, forcing it to issue a profit warning in June, since it makes sports utility vehicles in Alabama and exports them around the globe.

Reporting by Ilona Wissenbach; Writing by Edward Taylor; Editing by Douglas Busvine and Ken Ferris

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