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Daimler to seek 6 billion euros in cost savings at Mercedes

Manager Magazin said around 30,000 Mercedes-Benz cars with faulty vehicle electronics were produced at its plant in Tuscaloosa, Alabama, requiring expensive reworking which was causing production delays.

By: | Published: April 19, 2019 10:58 AM

Daimler is looking to make 6 billion euros ($6.75 billion) in cost savings and efficiency gains by 2021 at Mercedes-Benz passenger cars and a further 2 billion euros at its Daimler Trucks division, Manager Magazin said on Thursday.
Around 10,000 jobs will be cut at Daimler, the business-focused magazine said, without citing sources. Daimler declined to comment on the cost savings figure and on Manager Magazin's report but has previously ruled out forced redundancies until the end of 2020.

The magazine said the savings are being sought by Daimler's Ola Kaellenius, who will become Chief Executive in May. Daimler said in February it would pursue cost-saving measures after fourth-quarter operating profit plunged 22 per cent, hit by trade wars, rising costs for developing electric cars and an industry downturn. Manager Magazin said around 30,000 Mercedes-Benz cars with faulty vehicle electronics were produced at its plant in Tuscaloosa, Alabama, requiring expensive reworking which was causing production delays.

Those delays had led to a revenue shortfall of around 2 billion euros and could depress first-quarter earnings by up to half a billion euros, the report said. Daimler is due to release first-quarter earnings on April 26.
Manager Magazin also said Daimler plans to become a carbon neutral company by 2040, ensuring that all new cars, production methods and suppliers work in ways which do not produce carbon dioxide emissions. Separately, Kaellenius will not renew common projects with French carmaker Renault and Nissan, letting an alliance between the carmakers' lapse, the magazine said.

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