Mercedes needs to save more than five billion euros by 2027 and has already started to implement a package of measures that is very different from, say, Volkswagen’s. There will be no factory closings or layoffs, so the effort is concentrated in other areas. Exactly the one that the company from Wolfsburg is protecting.
It is clear that each car brand has its own internal structure and philosophy, and faces crises in different ways. Even Mercedes has not escaped the severe crisis affecting German brands, partly caused by electric cars, the invasion of Chinese brands and stricter environmental standards, he says. Klix.ba.
But, while Audi has already confirmed that it will close its factory in Brussels and while Volkswagen has reached an agreement with its employees, Mercedes has also introduced a package of measures at its headquarters that should help reduce costs by 2.5 billion from January 1. EUR by the end of 2025 and another 2.5 billion by 2027.
Savings start with management
Mercedes’ austerity plan is very different from the plan implemented by Volkswagen, whose members of the board of directors will not have their millions of salaries cut. The three-pointed star brand has made it clear that it will not close factories. According to a major German newspaper, a four-figure number of senior managers, ranging from team leaders to the highest levels, will be deprived of salary increases in 2025 and will have to commute to work at different brand headquarters.
Remote work, one of the great privileges until now, is coming to an end, so managers will abandon the work from home imposed during the Covid-19 pandemic and which has continued without reason until now, although it will only be allowed in exceptional cases, such as which are sick children who need care. The brand understands that it is necessary to reduce all costs and that it must start from the top.
Fewer cars sold – less salary
Mercedes is already realizing savings on variable costs, such as car manufacturing costs and production shift suspensions. For example, on assembly lines.
The ambitious austerity plan affects not only Germany, but also the whole world. The company from Stuttgart is re-examining its positioning, aware that it must become even more efficient and that everyone in the company must contribute to this. Fewer cars sold means less salary for managers.
The global giant has not closed its annual accounts, but they indicate more than bad results. The results of the third quarter are not at all encouraging, as net profit fell by almost 54 percent compared to the same quarter of 2023. Mercedes’ most luxurious models, from the E-Class onwards, are the most profitable, with sales down 12 percent, more than 30 percent for electric models, largely due to a slump in China.
Source: Klix.ba
Photo: Arhiva Autoblog.rs / Mercedes
Source: autoblog.rs
