Ola Källenius warns of “drastic” wage cuts and deeper restructuring at Daimler

The Swedish Mercedes chief now warns that the Daimler Group and the entire automotive industry are facing major cuts if they are to make it through the corona crisis.

German Daimler and others car manufacturers will be forced to do more thorough restructuring than they had planned before the crisis broke out.

This was stated by the Group’s Swedish CEO Ola Källenius during a webcast on Wednesday organized by the trade union IG Metall, report Bloomberg.

Ola Källenius talked about that the “much tougher reality” of the automotive industry after the pandemic will require “drastic” wage cuts. Daimler’s executives will receive larger reductions than lower-level officials, Källenius added.

The changes are necessary to protect the Group’s financial position and protect “enormous” investments in future technologies, he said.

At the end of April, Mercedes resumed production at the Sindelfingen factory outside Stuttgart.

The corona pandemic has closed factories and car parks around the world, which made Daimler’s struggle to carry out the deep restructuring that the group started in November.

Bloomberg notes that in April, Källenius indicated that the planned measures may not be adequate given the dramatic market contraction.

Daimler is now preparing equally The Volkswagen Group and BMW face losses in the second quarter, Bloomberg writes.

The Daimler Group’s plan, which was announced in November, included cuts to more than 10,000 jobs and EUR 1.4 billion in staff spending by 2022.

10,000 for jobs can disappear under 2025, reported German Automobilwoche recently according to unidentified sources.

Daimler, which had 299,000 employees at the end of 2019, called the data speculation.

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