Today, the Board of Management of DaimlerChrysler AG has set a reduction target of 8,500 jobs for the Mercedes Car Group Business Division. The Supervisory Board has authorized the Board of Management for the provision of the required funds.
The headcount reductions are to be achieved in the course of the next twelve months by means of voluntary termination agreements. These headcount reductions are indispensable. They will contribute to significant improvements in the competitiveness of Mercedes-Benz through an increase in productivity. This and the attractive Mercedes-Benz product range are two major requirements for the long-term success of Mercedes Car Group. The measures will also contribute to the sustained safeguarding of production at the location Germany.
DaimlerChrysler continues to stand by the Future Safeguarding 2012 agreement signed in 2004 without reservations; in the case of headcount restructuring measures, the agreement provides for voluntary terminations as a first step. All arrangements of the agreement negotiated with the employee representatives are being implemented on a consistent basis.
The decision of the Board of Management and the Supervisory Board will lead to charges of ?950 million. The major portion of the charges will be posted in the fourth quarter of 2005. The charges are to be compensated by extraordinary income as well as from improvements in the ongoing operative business. Therefore, the profit outlook for the Group for the year 2005 remains unchanged: DaimlerChrysler continues to expect a slight increase in operating profit compared with the prior year (5.8 billion), excluding charges related to the realignment of the smart business model.