"With a rod and a golden savings book": Daimler's "savings mania" angered the workforce

"With a rod and a golden passbook"
Daimler's "economy madness" angered the workforce

There is no Christmas peace at Daimler. Instead, the automaker's board of directors is turning many employees against them with its tightened austerity measures. However, industry experts see no other way out.

Instead of the Christmas spirit, this time there was gallows humor for the festival – and new nicknames for the Daimler bosses. "Sankt NikOLAus und Knecht Porthrecht", complained works councils before the holidays, were on the move with a rod and a golden bankbook to punish the workforce. The company, they wrote, "gives the good workers a hard spank". Even if such pithy words on the employee side are part of the trade, it is pretty obvious: The Stuttgart car manufacturer has a bad blessing.

It is clear to everyone that not everything can stay as it is. In response to the Corona crisis, employees and management agreed, among other things, to reduce working hours in some areas in the autumn. The annual premium will also be canceled in 2021. From the point of view of the workforce, however, the chairman of the board, Ola Källenius, and his head of personnel, Wilfried Porth, are now crossing the line. Too many numbers and too little focus on people, so the charge. There is talk of "savings madness".

Daimler 58.59

Daimler puts a lot of money and energy into its family of electric cars, so the focus is primarily on the future of the engine plants in Berlin and at the company's headquarters in Stuttgart-Untertürkheim. It was only at the end of November that management threatened not to relocate the development of important future technologies to Untertürkheim if the works council continued to insist on earlier commitments to utilize the site. The employee representatives felt they had been blackmailed, and a decision was postponed into the new year. Almost three weeks ago, hundreds of employees took to the streets in Berlin because they feared for their jobs. Together with IG Metall, the works councils carted protest mail in front of the corporate headquarters in Stuttgart.

"That scares people"

A so-called transformation fund has recently smoothed things out again. One billion euros in addition is intended, among other things, to secure jobs at the locations that are hardest hit by the transformation. A corona bonus of up to 1000 euros for employees in Germany had previously been announced.

General Works Council chief Michael Brecht, who had accused management at times of resistance to advice, strikes a conciliatory tone. "After the partly public emotional discussions about the future of our locations in the past few weeks, we are again in constructive talks," he says. The corona pandemic with all its effects is accelerating the transformation, and of course you first have to keep an eye on expenditure.

"However, it always seems to be about the personnel costs. That scares people," says Brecht. Källenius always speaks of a marathon that has to be mastered. But then he should also remember to divide up the power well, warns the general works council chief. From his point of view, it would be a mistake to weaken the people who are supposed to run the marathon and to question their performance. "The board of directors cannot win a race on its own – it can lose," says Brecht.

With the aim of reducing costs, Källenius has actually set a remarkable pace since taking office in May 2019. At least 15,000 jobs, rather significantly more, should be eliminated, also because the savings plans were sharpened again due to the Corona crisis.

"It's all about the cost"

The production network in the passenger car sector is being thinned out. The Smart factory in Hambach, once a Franco-German prestige project, has been sold by Källenius. Mercedes-Benz will no longer build cars in Brazil either. A cooperation with the Chinese major shareholder Geely is supposed to make the development of engines more efficient. In the truck sector, a package is made with Volvo for fuel cell technology and with Google's sister company Waymo for autonomous trucks. In contrast, Daimler sold most of the ideas and startup forge Lab1886. And it is at least stubbornly speculated that the next part of the mobility services operated jointly with BMW could be their turn. The expensive cooperation with the Munich competition in the development of autonomous cars has been on hold for some time.

As difficult as it is for the employees: Daimler has to go through it, says industry expert Stefan Reindl. "It's only about the costs or the yield. Källenius is now tackling both of these," says Reindl, who heads the Institute for the Automotive Industry in Geislingen. Källenius wants to focus more on luxury and the upper end of the segments, where more money can be made per car. Reindl also finds a good plan that could work. But also a lengthy project. "The cost side, on the other hand, can be influenced in the short term – especially through personnel costs," he says.

The expert considers the Daimler workforce as well as the investors to be spoiled for success. "Källenius must strictly adhere to the measures," he advises – even if that does not mean that management should not continue to approach the employees. "Confrontation is not promising."

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