DCX to Collaborate More between Mercedes and Chrysler Groups
DaimlerChrysler AG, on Tuesday, announced a new "efficiency program" would eliminate approximately 6,000 jobs worldwide
within the next three years. Additionally, its Mercedes-Benz division and Auburn Hill's-based Chrysler Group will work more closely to improve quality and reduce costs, commented recently appointed DCX CEO Dieter Zetsche.
While the cuts to its workforce aren't as drastic as those made late last year by General Motors, which will see more than 30,000 lose their jobs within five years, or the 25,000 to 30,000 employees Ford plans to let go before 2012, as announced yesterday, 6,000 employees represents approximately 20 percent of the automaker's general and administrative (G&A) workers, according to a press release. The German-American automaker expects to reduce costs by $2.1 billion+ ($1.8 billion+ USD) per year, when previous cuts are factored in. Tuesday's
announcement is forecast to reduce costs by $1.4 billion ($1.2 billion USD) annually.
"Over the last several years, we focused on our automotive business and started to streamline the core processes in our divisions," said Zetsche. "But to safeguard our future in this competitive global industry, we need to apply that same equation across all general and administrative functions with the added dimension of adapting to the needs of our business."
The actions should help DCX eliminate redundancies in the areas of finance and controlling, human resources and general strategy, among others, areas that are currently being doubled up between its Stuttgart and Auburn Hills' headquarters. According to the press release, such areas will be centralized with those who would have previously reported to an executive or supervisor in
one division, soon reporting to the respective head of that function throughout the entire company.
"Redundancies between staff functions at the corporate and operating levels will be eliminated," a press release stated. Or in other words, the merger of "equals" will finally be complete, with a single, centralized worldwide headquarters and a drastically reduced white collar force in one or both of its main global centres. Most likely, however, North American operations will be hardest hit.
"Our objective in taking these actions is to create a lean, agile structure, with streamlined and stable processes that will unleash DaimlerChrysler's full potential," said Zetsche. "We're going to build on a strong product portfolio."
While the
news will upset G&A staff at Chrysler Group, it makes sense, at least on paper. Cutting down on redundancies is always better for any business, and the process should allow DCX to be more competitive.
Whether or not DaimlerChrysler would be better off moving its headquarters out of labour-union plagued Germany, a country that also encourages political meddling within corporate structures by making enforcing the inclusion of political and union representatives on a company's board of directors, is another question worth debating. A full scale move out of Germany and into a freer business environment, while probably the more intelligent choice for the company overall, will never happen.
DaimlerChrysler AG, on Tuesday, announced a new "efficiency program" would eliminate approximately 6,000 jobs worldwide
 |
| DaimlerChrysler AG CEO Dieter Zetsche, on Tuesday, announced a new "efficiency program" that will eliminate approximately 6,000 jobs worldwide within the next three years. (Photo: Trevor Hofmann, Canadian Auto Press) |
While the cuts to its workforce aren't as drastic as those made late last year by General Motors, which will see more than 30,000 lose their jobs within five years, or the 25,000 to 30,000 employees Ford plans to let go before 2012, as announced yesterday, 6,000 employees represents approximately 20 percent of the automaker's general and administrative (G&A) workers, according to a press release. The German-American automaker expects to reduce costs by $2.1 billion+ ($1.8 billion+ USD) per year, when previous cuts are factored in. Tuesday's
 |
| The German-American automaker, which has just introduced an all-new Mercedes-Benz S-Class, expects to reduce costs by $2.1 billion+ ($1.8 billion+ USD) per year. (Photo: Mercedes-Benz Canada) |
"Over the last several years, we focused on our automotive business and started to streamline the core processes in our divisions," said Zetsche. "But to safeguard our future in this competitive global industry, we need to apply that same equation across all general and administrative functions with the added dimension of adapting to the needs of our business."
The actions should help DCX eliminate redundancies in the areas of finance and controlling, human resources and general strategy, among others, areas that are currently being doubled up between its Stuttgart and Auburn Hills' headquarters. According to the press release, such areas will be centralized with those who would have previously reported to an executive or supervisor in
 |
| Dieter Zetsche, left, and ex-Chief Operating Officer Wolfgang Bernhard, now CEO of the Volkswagen brand, demonstrate Chrysler's "Stow 'n Go" minivan seating and storage system available on Chrysler's Town & Country and Dodge Grand Caravan minivans, innovations that have helped keep DCX ahead in the minivan segment. (Photo: Joe Wilssens, DaimlerChrysler Canada) |
"Redundancies between staff functions at the corporate and operating levels will be eliminated," a press release stated. Or in other words, the merger of "equals" will finally be complete, with a single, centralized worldwide headquarters and a drastically reduced white collar force in one or both of its main global centres. Most likely, however, North American operations will be hardest hit.
"Our objective in taking these actions is to create a lean, agile structure, with streamlined and stable processes that will unleash DaimlerChrysler's full potential," said Zetsche. "We're going to build on a strong product portfolio."
While the
 |
| A full scale move out of Germany and into a freer business environment, while probably the more intelligent choice for the company overall, will never happen. (Photo: Trevor Hofmann, Canadian Auto Press) |
Whether or not DaimlerChrysler would be better off moving its headquarters out of labour-union plagued Germany, a country that also encourages political meddling within corporate structures by making enforcing the inclusion of political and union representatives on a company's board of directors, is another question worth debating. A full scale move out of Germany and into a freer business environment, while probably the more intelligent choice for the company overall, will never happen.