Tuesday, May 11

Daimler to seek 6 billion euros in cost savings at Mercedes: Manager Magazin

FILE PHOTO: The Daimler logo is seen before the Daimler annual shareholder meeting in Berlin, Germany, April 5, 2018. REUTERS/Hannibal Hanschke

FRANKFURT (Reuters) – Daimler is seeking 6 billion euros ($6.75 billion) in cost savings and efficiency gains by 2021 at Mercedes-Benz passenger cars and a further 2 billion euros at Daimler Trucks division, Manager Magazin said on Thursday.

Daimler declined to comment on the cost savings figure and on the Manager Magazin report.

The cost savings are being sought by Daimler’s Ola Kaellenius, who will become Chief Executive in May, Manager Magazin said, without citing sources.

In February Daimler said it would pursue cost savings measures after fourth-quarter operating profit plunged by 22 percent, hit by trade wars, rising costs for developing electric cars and an industry downturn.

Around 30,000 Mercedes-Benz cars with faulty vehicle electronics were produced at its plant in Tuscaloosa, Alabama, requiring expensive reworking and delays, Manager Magazin said.

The delayed production at Tuscaloosa has led to a revenue shortfall of around 2 billion euros, and could depress first quarter earnings by up to half a billion euros, Manager Magazin said.

Daimler is due to release first quarter earnings on April 26.

Daimler also plans to become a carbon neutral company by 2040, ensuring that all new cars, production methods, and suppliers will work in a way which do not produce carbon dioxide emissions, Manager Magazin said.

Separately, Kaellenius will not renew common projects with French carmaker Renault and Nissan, letting an alliance between the carmakers lapse, the magazine said.

Reporting by Edward Taylor; Editing by Michelle Martin

Our Standards:The Thomson Reuters Trust Principles.

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