Frankfurt, Germany – At least 5,000 jobs are set to be cut at Daimler Chrysler AG’s Mercedes Car Group as the new chief executive seeks to turn around the struggling group.
Dieter Zetsche, who takes over as DaimlerChrysler CEO on Jan. 1 and already has assumed responsibility for the Mercedes division, is scheduled to meet with the company’s supervisory board today in Detroit.
Though he has not said what he plans to talk about, officials with DaimlerChrysler, its labor groups and analysts have warned that Zetsche may focus on trimming thousands of jobs at the struggling Mercedes group.
A person familiar with the situation, who asked not to be named because it would put his job at risk, told The Associated Press that as many as 5,000 jobs could be affected at Mercedes, the unit that Zetsche headed before the 1998 merger with Chrysler Corp.
A second source confirmed those plans.
The division was once the pride of DaimlerChrysler, and industry watchers are keen to see if he can invigorate Mercedes the way he did Chrysler, which posted its eighth straight quarterly operating profit in July.
At the Frankfurt auto show earlier this month, Zetsche was asked if there would be cost-cutting measures or job cuts at the Mercedes business, which includes the struggling Smart compact car unit.
“The whole production process has to be addressed,” he said, but would not give details.
Zetsche was named as the next DaimlerChrysler boss after Juergen Schrempp unexpectedly announced July 28 that he would step down at the end of the year. The move relieved investors who felt the Schrempp-engineered merger of Daimler-Benz with Chrysler had failed to bring the promised returns.
Zetsche took over Mercedes after Eckhard Cordes, who helped Schrempp plan the merger and was once considered a leading contender for the top job, stepped down.
Since then, German media have been rife with claims that Zetsche wants to speed up those reforms and is considering cutting jobs to do so.
The Mercedes group has struggled this year, facing a 1.3-million car recall amid quality problems and owner dissatisfaction. The company had already said it was looking at some $1.4 billion in restructuring costs this year.
