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Daimler To Slash 10% Of Management Amid Global Auto Industry Bust 

Courtesy of ZeroHedge View original post here.

Daimler AG will slash 10% of its top management, or about 1,100 leadership positions, in the near term, as the global economy continues to grind to a halt.

German daily newspaper Sueddeutsche Zeitung, first broke the story of the sweeping cost reduction program Friday morning, citing a letter distributed by administrators of the carmaker's works council.

"The works council was recently informed by management about the personnel and financial situation of the company," works council chief Michael Brech told employees. "Talks have begun, there are no results yet."

Brecht sent an email to 130,000 Daimler employees about upcoming job cuts on Friday morning. 

He said CEO Ola Kallenius had outlined a "concrete figure" on the cuts earlier in the week, along with a more comprehensive cost reduction program that will shield the company from a downturn in the global auto industry. 

Kallenius has warned about the global auto bust, now underway for two years, has impacted auto sales of Daimler in large auto markets like China, North America, and Europe.

"Management never misses an opportunity to draw attention to the poor financial situation of our company," Brech told employees. 

The global auto bust is what's helping spur a vicious synchronized global slowdown. 

The reaches of the auto market go deep, with long supply chains and large consumption of raw materials, textiles, chemicals, and electronics. The industry is home to millions of jobs, and last year, the sector shrank for the first time since the global financial crisis.

As shown in the chart below, demand for global vehicle sales has plunged, something that has undoubtedly spurred Daimler to batten down the hatches before the worldwide trade recession begins. 

Brecht noted the internal struggles of the company was one of "extreme uncertainty, and even anger" — he also said the cost reduction program hadn't been enacted on managerial positions since the 2008 financial crisis.

 


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