Daimler Reaches Agreement with Its Employee Council

Following the release of the financial report for the first quarter of 2009, which indicated a total EBIT loss of 1,426 million euro, Daimler has turned to cost cutting measures to prevent another disastrous quarter. The most important part of those measures is an agreement with the Employee Council. The two parties reached common ground today, as both of them tried to cut cost while preserving jobs.

The key elements of the agreement are the collective reduction in working time for employees who are not included in short-time working arrangements, a reduction in the allowance paid towards the short-time compensation and the postponement by five months of the upcoming wage-tariff increase. By doing so, the company will save up to 2 billion euros.

In the present economic situation, there is no alternative to this package of measures. A key feature of the package is that all employees will make their own contribution. I am aware, however, that the measures involve painful losses for many of our employees,” Wilfried Porth, Daimler board member said in a release.

In response to these cuts, the employees will be protected "against termination of employment for reason of business operations (redundancies) for the duration of the company-wide agreement from May 1, 2009 until June 30, 2010," regardless of the time they joined the company.

"All employee groups will be protected by the agreement and everyone will make a contribution towards reducing costs. The entire management team up to the Board of Management and the Supervisory Board will also be included in the cost reductions," added Erich Klemm, Employee Council chairman.

The fate of the profit-sharing bonus for the year 2008 has not yet been established, but the company is trying whether to place it in an equity fund or pay it in cash.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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