Daimler Truck intends to significantly cut employment in Germany by a thousand positions.
Daimler Truck, a leading automotive company based in Germany, has unveiled a significant cost-cutting and restructuring plan aimed at enhancing its competitiveness and financial performance. The plan, dubbed "Cost Down Europe", will see the company permanently reduce recurring annual costs by over €1 billion by 2030.
**Cost-Cutting Measures**
The cost-cutting measures will encompass comprehensive efficiency improvements across production, headquarters, administration, sales, and development. Savings will not be limited to personnel costs but will also target expenditures for materials, administration, IT infrastructure, and research and development.
One of the strategies involves shifting some production volume to best-cost countries, contributing to the overall cost reduction strategy.
**Job Reduction Plans**
Approximately 5,000 jobs in Germany will be cut by 2030. The job reductions will primarily rely on natural attrition and expanded early retirement options. Targeted severance programs will also be available in some cases.
Crucially, there will be no operational redundancies (forced layoffs) until the end of 2034, ensuring the reductions are handled in a socially responsible manner. Key points of the restructuring have been negotiated with the general works council, providing clear future perspectives for the affected locations in Germany.
**Strategic and Financial Goals**
The adjusted margin in the automotive business is expected to reach between 9% and 13% by 2030, up from the previous estimate of 7% to 11%. Daimler Truck projects organic revenue growth of 3% to 5% per year until 2030, supported by growth in the North American vocational truck market and zero-emission vehicle sales in Europe.
Free cash flow is expected to increase by 50% by 2030 compared to 2024. These ambitious goals aim to ensure Daimler Truck remains robust and competitive, even in challenging market conditions.
Daimler Truck, with around 35,500 employees in Germany, has five sites: Gaggenau, Kassel, Mannheim, Stuttgart, and Wörth am Rhein. Discussions about socially acceptable job cuts have been ongoing since May, when Daimler Truck management and the works council agreed on the future of German sites.
The truck production division of Daimler Truck is affected by these job cuts. The CEO, Karin Radström, aims for a profit margin of at least 12 percent through the "Cost Down Europe" savings program. Shareholders of Daimler Truck, a DAX company, were promised a double-digit profit margin.
Despite the challenging job reduction plans, CEO Radström remains hopeful about the company's future profits. The measures of the "Cost Down Europe" savings program do not include dismissals due to operational reasons until the end of 2034, as agreed in a paper between Daimler Truck and employee representatives.
The cost-cutting measures within the manufacturing industry of Daimler Truck, a leading automotive company, will extend beyond personnel costs, targeting reductions in expenditures for materials, administration, IT infrastructure, and research and development. In alignment with the company's financial goals, the adjusted automotive business margin is expected to reach between 9% and 13% by 2030, and Daimler Truck plans to increase its free cash flow by 50% by 2030 compared to 2024.
