Mercedes confirms 8,500 job cuts

[redeye]

Wednesday, 28 September 2005, 18:47 GMT 19:47 UK

Carmaker DaimlerChrysler has confirmed plans to cut more than 8,500 German jobs at its troubled Mercedes division, many more than originally expected.
The cuts are 3,500 more than previously expected and will take place over the next 12 months.

Profits at Mercedes have fallen as the company struggles to deal with quality control problems and the strong euro.

The German carmaker has also suffered sharp losses at its Smart minicar firm.

Last month, DaimlerChrysler appointed Dieter Zetsche, previously the boss of its US arm Chrysler, to head Mercedes, replacing outgoing chief executive Juergen Schrempp.

The cuts will mostly affect the Mercedes plant in Sindelfingen, Germany, the company said.


Smart losses

News of the job losses at Mercedes came a day after German rival Volkswagen said it would build its new sports utility vehicle in Germany - a move which unions said would safeguard 1,000 jobs in the country.

Volkswagen had threatened to build its latest Marrakesh model in Portugal unless it could reduce the cost of manufacturing in its home market.

DaimlerChrysler reached a deal with employee representatives on its works council last year, which guaranteed that no worker would be laid off in exchange for labour reforms aimed at saving 500m euros ($601m; £340m) in costs.

That would mean that any cuts would most likely have come from voluntary redundancies.

The company employs about 160,000 people in Germany and has almost 385,000 workers worldwide.

Mercedes made an operating profit of 12m euros in its second quarter, after registering a first-quarter operating loss because of restructuring costs at its Smart division.

[C-Rod]

Thanks "RED"....for the info..not surprising though...since thier quality for the last few years has been "disgusting"...Much of the industry is going through the same...though, conversely, Toyota is building its second plant in Woodstock, Ontario, Canada, which will open in 2008, with the new re-designed Toyota Rav 4.....They must be doing something right....Great job security for me.....[:D]