Daimler to cut $6.75 billion at Mercedes, sever ties with Renault-Nissan

22 April 2019 - Autoblog

Daimler to cut $6.75 billion at Mercedes, sever ties with Renault-Nissan

10,000 jobs to go, magazine says, and there was a costly error from Tuscaloosa

Daimler is looking to make 6 billion euros ($6.75 billion) in cost cuts 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. The separations will likely be voluntary, as Daimler has previously ruled out layoffs until the end of 2020.
Daimler declined to comment on the cost savings figure and on Manager Magazin's report.

The magazine said the savings are being sought by Daimler's Ola Kaellenius, who will become CEO in May.

Daimler said in February it would pursue cost saving measures after fourth-quarter operating profit plunged 22 percent, 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. The Infiniti Q30 and QX30 are built on a Mercedes platform. Mercedes plans to explore more collaboration with Geely, which is Daimler's biggest shareholder with a 9.7 percent stake.

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