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Automotive industry That's how Mercedes wants to save: Agreement with the general works council

Source: dpa | Translated by AI 2 min Reading Time

Mercedes wants to save and become more profitable. Now the car manufacturer has agreed on measures with the general works council. What is in store for the employees in Germany?

According to its own statements, Mercedes-Benz has agreed on a comprehensive package of measures with the general works council. This is how the company aims to become more competitive.(Image: © Mercedes-Benz Group AG)
According to its own statements, Mercedes-Benz has agreed on a comprehensive package of measures with the general works council. This is how the company aims to become more competitive.
(Image: © Mercedes-Benz Group AG)

Mercedes-Benz aims to become more competitive and has reportedly agreed on a comprehensive package of measures with the central works council. "The savings and flexibility measures range from cuts in compensation components to an increase in personnel flexibility with more temporary work in production," a spokeswoman stated. The "Wirtschaftswoche" (german economy magazine) had previously reported on this.

Part of the package of measures is also a severance program for employees in indirect areas, meaning not in production. The program is said to be socially responsible and fair. There are no compulsory redundancies, and the double voluntariness applies.

"Zusi" will be extended until the end of 2034

In addition, the company and the general works council have agreed to extend the current employment security until the end of 2034. General works council chief Ergun Lümali had been demanding this for some time. The "Zusi," as it is internally called, had so far generally excluded redundancies for operational reasons until the end of 2029.

The package of measures and the employment security agreement apply to around 91,000 employees in Germany, it was said. Among other things, the tariff increases of the current collective agreement in the metal and electrical industry are to be counted only halfway by deducting parts from the extra-tariff allowance, as the spokeswoman said in response to an inquiry.

The profit-sharing for employees is also to be paid out for the last time next year based on the current general works agreement for the 2025 financial year. After that, there is currently no agreement for profit-sharing.

Already at the end of last year, it was decided "that the base salary for the board, for senior executives, and team leaders not covered by the collective agreement will not be increased for the year 2025," the spokeswoman said.

Profit slump last year

The car manufacturer suffered a profit slump last year. During the presentation of its annual figures in February, the board already outlined key points of the planned savings program, with Mercedes referring to a performance enhancement program ("Next Level Performance").

The Stuttgart (Germany)-based company wants to improve its profitability. By 2027, production costs are to decrease by about ten percent compared to today. Additionally, material costs will be optimized, and fixed costs are also to decrease by another ten percent by 2027.

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