German automaker Mercedes-Benz has reached an agreement with the works council representing the interests of employees — they have agreed to reduce a number of payments in exchange for maintaining job security for most employees until 2034.
This was reported by German media with reference to the company’s press service.
The agreements, in particular, provide for a halving of the planned salary increase, a reduction in the size of annual bonuses, etc. Some employees will still be laid off, but the layoffs will not affect production units. It is not reported how many employees are planned to be laid off.
Mercedes-Benz, like other European automakers, is facing declining demand, rising costs, increased competition from Chinese companies, and other difficulties. Mercedes-Benz management wants to reduce production costs by 10% by 2027. In December, Volkswagen came to a similar agreement with the works council. Under the threat of plant closure, workers agreed to refuse to pay them bonuses and premiums in exchange for job security. Yesterday, Der Spiegel reported that Audi plans to cut personnel costs by €1.5 billion a year in order to reduce costs, which includes layoffs and reductions in some benefits.
