DaimlerChrysler agrees deal to save jobs

Click to follow
The Independent Online

The German car giant DaimlerChrysler reached a crucial cost-cutting agreement with Europe's biggest engineering union yesterday in a landmark deal securing 6,000 jobs and ending more than a week of protests and strikes at the company.

The German car giant DaimlerChrysler reached a crucial cost-cutting agreement with Europe's biggest engineering union yesterday in a landmark deal securing 6,000 jobs and ending more than a week of protests and strikes at the company.

Under the agreement, 160,000 employees will work longer hours and give up perks such as hourly breaks to save the company about €500m (£331m) a year from 2007 onwards. The deal was brokered after more than 16 hours of talks between management, the company's works council and leaders of Germany's giant IG Metall engineering workers union.

However Jürgen Schrempp, DaimlerChrysler's chairman, said its successful conclusion had been achieved only through exploiting "all the loopholes" in existing across-the-board wage and conditions agreements.

In a statement reflecting the current mood in German company boardrooms, Mr Schrempp, speaking at the company's Stuttgart headquarters, said: "Germany does not need any across-the-board ruling on working hours nor does it need discussions about days off. German companies need room to breathe in order to meet the cycle of orders; they need flexibility."

The agreement also ended a potentially serious confrontation between management and unions at DaimlerChrysler which last week spread to company plants throughout Germany and led to work stoppages and protests by more than 60,000 IG Metall trades unionists.

Management at the company's main plants in the southern state of Baden-Wüerttemberg, where employees had enjoyed better terms and conditions than elsewhere, had demanded that workers accept €500m of savings. It also took the unprecedented step of threatening to move key sections of the industry to the cheaper north German city of Bremen and South Africa unless the unions agreed. The move would have wiped out 6,000 jobs at the company's Sindelfingen plant near Stuttgart where the top-of-the-range C-class Mercedes is produced.

The dispute prompted Gerhard Schröder, the Chancellor, to demand that Daimler-Chrysler managers exercise restraint and agree to accept wage cuts themselves. Mr Schröder described the outcome as a "victory for common sense".

The agreement includes a 50 per cent cut in hourly breaks enjoyed by workers in Baden-Wüerttemberg and a 40-hour working week in all development and planning departments. It also includes the introduction of a single pay structure for production office staff and greater flexibility in adjusting employment levels by assigning young skilled workers and temporary staff to an internal employment agency.

In a conciliatory gesture to the unions and Mr Schröder's government, DaimlerChrysler's board agreed to take a 10 per cent cut in overall pay, while 3,000 managers in Germany will have their packages reduced.

Comments