A Peek into Daimler Truck's Cost-Cutting Measures and Job Reductions
- Daimler Truck Reduces Workforce Expenses
Words of Warning: This post discusses potential job losses and financial adjustments within a specific company.
Things are heating up at Daimler Truck, the renowned commercial vehicle manufacturer, as they unveil their plans for a cost-cutting program. Nicknamed the "Cost Down Europe" program, their objective is to slash recurring costs in the European truck division, Mercedes-Benz Trucks, by over one billion euros by 2030 at the latest.
"We've trimmed costs significantly in recent times," shares Daimler Truck CEO, Karin Radström. This program represents the next phase in their cost-saving endeavor. All expense categories, including personnel, will get the axe. Radström also confirmed that job cuts will ensue.
While forced layoffs in Germany are off the table, courtesy of a works agreement holding out until 2029, the main focus remains on German operations. Approximately 35,500 employees, excluding those in the bus segment, work for Daimler Truck in Germany.
Discussions with the works council about the cost-cutting program are underway, with aims to establish mutually beneficial and sustainable measures. Further details about these conversations were not disclosed by the top brass.
However, it's important to note that Michael Brecht, chairman of the works council, stated that the negotiations are far from resolved. Brecht emphasizes Daimler's need for a competitive company, pledging readiness for more talks and urging the board to offer proposals that fit into a forward-looking growth strategy.
In a related matter, union employees at Daimler Truck in Germany will receive a profit-sharing payment of 4,140 euros in April—a decrease compared to the previous year (7,000 euros).
The Fiscal Year 2024 in a Nutshell
Last year wasn't kind to the industry, with global sales plummeting by 12%. Nevertheless, Daimler Truck expects to boost their day-to-day earnings this year, following a profit decline in 2024. The predicted adjusted operating profit increase ranges between 5 to 15% compared to the previous year.
The grimmer financials of 2024 saw the operating result decrease by 15% to 4.7 billion euros and overall sales dip by 3% to 54.1 billion euros. A challenging economic climate in Europe and Asia, combined with heavy write-downs, played spoilsport to the profits. However, a silver lining emerged in the form of a robust order intake during the fourth quarter, with vehicle orders increasing by 15%.
- Daimler Truck, a renowned commercial vehicle manufacturer, aims to reduce costs in the European truck division, Mercedes-Benz Trucks, by over one billion euros by 2030, with a special focus on German operations.
- In the context of Daimler Truck's cost-saving program, Michael Brecht, the chairman of the works council, stated that the negotiations are far from resolved and emphasized the need for a competitive company, pledging readiness for more talks and urging the board to offer proposals that fit into a forward-looking growth strategy.
- As part of Daimler Truck's cost-cutting measures, vocational training programs across multiple tiers could potentially face adjustments, considering the reduction in costs across personnel categories.
