Daimler-Benz to shed 14,700

A FRESH wave of economic misery swept through Germany yesterday as Daimler-Benz, the giant car and engineering group, announced that thousands of jobs are to go.

Daimler, which last year shed 18,000 workers, said it planned to make a further 14,700 of its 376,000- strong workforce redundant this year.

Statistics released at the same time as Daimler's statement showed seasonally unadjusted unemployment dropped to 3.36 million in March after two successive monthly increases. But the improvement was widely attributed to mild weather boosting demand for outdoor workers.

Bernhard Jagoda, director of the labour office, stressed the weather was the main cause for the fall in registered jobless. 'The picture looks better because of the spring sunshine,' he said. 'The economic outlook and structural problems are unchanged.'

His comments were driven home by gloomy industrial production figures showing a provisional fall of 2.2 per cent in industrial orders in February from the previous month and 13.3 per cent below a year earlier.

There were also bleak assessments of the prospects for growth from Guenter Rexrodt, the economics minister, who said Germany's gross national product could fall by more than 1 per cent this year.

Edzard Reuter, president of Daimler, added to the gloom: 'The German economy is in the middle of a real recession. Nothing suggests that this trend has come to an end. In other words we must prepare for even tougher times in 1993 than in the second half of last year.'

In the first quarter of 1993, sales fell by a quarter. This year the company expects profits to fall further against a stagnant sales background.

In 1992, Daimler's operating profits including financial operations dropped by a third to DM2.5bn ( pounds 1.03bn). Net consolidated profits fell to DM1.45bn against DM1.94bn.

Daimler also confirmed that its aeronautics subsidiary, Deutsche Aerospace, would cut 5,600 jobs this year. DASA, which employs 81,870 people, had previously announced that it would axe 7,500 jobs by the end of next year but there are fears that as many as 11,000 jobs may go by the end of 1994.

Hopes that the gloomy economic news would produce a further cut in German interest rates caused the mark to weaken. The dollar rose by 1.5 pfennigs to DM1.6135 and the pound rose 0.91 pfennigs to DM2.4366. The mark's weakness helped the French franc to rise further from its floor in the European exchange rate mechanism and it ended at Fr3.3870 to the mark, against its floor of Fr3.4305.