Mercedes Benz Implements Cost-Cutting Plan, Longer Hours for Employees
Overview of Mercedes Benz's New Cost-Cutting Measures
Longer Working Hours and Salary Adjustments
June 26 (Reuters) - German carmaker Mercedes Benz wants its employees to work longer hours for the same salary, among other measures aimed to cut costs across the company, it said in a note to employees on Friday.
CEO Statement on Efficiency
• "The cost per hour must decrease – in development, sales, administration, and production ... we should work more for the same pay in all areas," CEO Olaf Kallenius and others wrote in a note to employees
Postponement of Special Payment
• A special payment amounting to 18.4% of one month's salary, originally scheduled for July, is to be postponed until 2027, Mercedes said
Operational Changes and Employee Impact
Relocation of Functions Abroad
• Some products and administrative functions are to be relocated abroad, the company said
Works Council Response
• Mercedes' works council said that although the company's challenges do not lie with the employees, it is the employees who are expected to bear the burden
Market and Industry Context
External Economic Pressures
Impact of Middle East Conflict and Tariffs
• The Middle East conflict has driven up global industry costs, compounding pressure on European automakers already hit by high U.S. import tariffs
Stock Performance
• Mercedes' stock is down by more than a quarter year-to-date, underperforming the wider pan-European STOXX 600's subindex for carmakers and car parts manufacturers
(Reporting by Tristan Veyet in Gdansk, ALexander Huebner in Munich, editing by Friederike Heine)
