Mercedes Benz Discharges More Than 1,000 Positions
Previously, Mercedes-Benz has a plan on saving €1.65bn (£1.4bn). This is by reducing more than 1,000 jobs in the latest sign.
Moreover, German carmakers are battling to make significant investments in electric car technology.
Meanwhile, carmakers around the world are consuming billions on improving battery-powered electric vehicles.
At the same time, sales of internal combustion engines are decelerating. It is due to the face of economic vulnerability and scandals over emissions.
Earlier, Daimler’s parent company of Mercedes-Benz indicated that premium cars division would carry the bulk of the job cuts with reductions of €1bn from its wage bill projected by 2022.
The administration and contractors will be mainly affected, while the vans and trucks sectors will together cut €650m in the workforce and other costs.
Daimler stated it would restrict investment in property, plant, and equipment and research and development at current levels.
The restriction is with plans in place to lessen investment in the medium term.
Strengthening of Mercedes Financial Strength
On the other side, carmakers are on the verge of a key period in the transition away from dependence on fossil fuels. This is because of the strict rules on carbon dioxide emissions going into force on January 1.
Manufacturers will face substantial fines. This is if the typical emissions of cars marketed in the EU are above 95g of CO2 per kilometer.
In a statement, the chair of Daimler’s board, Ola Källenius, stated, “The expenditure needed to achieve the CO2 targets requires comprehensive measures to increase efficiency in all areas of our company. This also includes streamlining our processes and structures.”
He also added, “This will have a negative impact on our earnings in 2020 and 2021. To remain successful in the future, we must, therefore, act now and significantly increase our financial strength.”
Elsewhere, Daimler shares tumbled by 3% in early trading last Wednesday.
In 2018, it made earnings before tax of €10.6bn. On the flip side, it has given constant profit warnings during 2019. Moreover, there was a valuation from the specialist’s earnings before tax of about €6.3bn for 2019.
The information was according to average prices from S&P Global Market Intelligence.
