Daimler Announces Deal to Preserve Jobs

Daimler AG (DAI) workers reached an agreement with managers to preserve jobs at the Mercedes-Benz car plant in Sindelfingen, Germany, until 2020, ending a standoff over plans to shift some production to the U.S.

The 37,000 workers at the factory in the southwestern German state of Baden-Wuerttemberg will face no mass firings over the next 10 years, the automaker's works council said today in an e-mailed statement.

"We're pleased that we could secure jobs over such a long period," Erich Klemm, Daimler's top labor representative, said in the statement.

Daimler, the world's second-largest maker of luxury cars, said Dec. 2 that production of its best-selling Mercedes-Benz C-Class sedan would be moved to Alabama, ending the model's assembly in Sindelfingen after more than 25 years. Unions demanded a guarantee that no employees would be fired.

The carmaker will create 2,700 positions in Sindelfingen by manufacturing seats, producing light-weight chassis components and shifting production of the SL-Class roadster from a plant in Bremen, Germany, the works council said.

Early Retirement

Daimler will also improve conditions for early retirement and won't limit the number of older employees allowed to work part-time starting in 2015. The company will continue to offer voluntary buyout packages to limit the number of people affected by the C-Class shift, which is due to take place in 2014 in an effort to cut costs and reduce the effects of changes in the dollar-euro exchange rate.

The Mercedes-Benz Cars division's worldwide sales in November rose 16% from a year earlier to 98,400 cars and sport-utility vehicles, with deliveries jumping 19% at the Mercedes-Benz brand and falling 3.8% at the Smart small-car unit. C-Class sales rose 5.2% to 18,200 cars.

Thousands of employees demonstrated last week at Sindelfingen, the company's largest factory, as well as at Daimler's corporate headquarters in nearby Stuttgart. Daimler plans to hire more than 1,000 workers for C-Class production in Tuscaloosa, Alabama. It will continue to assemble the model in Bremen, Beijing, and East London, South Africa.

Before it's here, it's on the Bloomberg Terminal.