Issue: Dec 2009


Mercedes-Benz Cars Increases Growth Opportunities and Protects Employment



Additional production of next-generation C-Class in Tuscaloosa plant, USA

by John Larkin

The Board of Management of Daimler AG decided on the further development of Mercedes-Benz Cars\' global production network. In connection with the launch of the next generation of the C-Class, important preparations will be made in the period from 2014 on so that Daimler maintains its competitiveness, utilizes the growth opportunities presented around the world, and is able to protect jobs over the long term.

Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: "This step is essential for strategic and operational reasons, and helps the company to remain competitive and to fully utilize future growth opportunities."

The decision to produce the C-Class closer to the markets will make Daimler more independent of exchange rates, will optimize its profitability in this price-sensitive segment, and will allow it to fulfill regional customer requirements even faster and more flexibly.

Additional local production in the United States

In order to benefit even more from growth opportunities and in particular from market developments in North America also with a strong euro, the C-Class sedans for that region will be produced at Mercedes-Benz U.S. International in Tuscaloosa, Alabama as of 2014. From today\'s perspective, this additional production facility will represent less than one-fifth of the total C-Class model range. At MBUSI, further investments will be made in the existing capacities. As well as the additional model series, the plant will continue to produce the R-Class, the M-Class and the GL-Class.

This further development of Mercedes-Benz Cars\' worldwide production network is not least intended to reflect changes in markets and sales regions. Due to the projected demographic developments in the United States, the automobile market in that country will further strengthen its already important role, opening up additional growth opportunities. To make optimal and competitive use of those opportunities, it is essential to have production facilities of the high-volume C-Class close to the market. The sedan version of the series is already the best-selling Mercedes-Benz model in the US market.

"Due to the tough competition in the C-Class segment, it is extremely important for us to optimize our production costs for the future," stated Rainer Schmuckle, Chief Operating Officer of Mercedes-Benz Cars. "This applies not only to our direct production costs, but also to the import-duty and logistics advantages of each production site. But it is just as important for us to be able to offer alternatives to the Sindelfingen C-Class employees affected by this decision in order to maintain their employment. We are convinced that our concept fulfills this criterion."

Expansion of competence centers and investment in Germany

The importance of the Sindelfingen plant will be enhanced as a central technology and research facility of Mercedes-Benz Cars and also as a worldwide competence center for the production of premium and luxury automobiles, increasingly with alternative powertrain systems.

The production of the C-Class sedan for markets in Europe and of the other C-Class model versions will be concentrated at the Bremen plant in the future, and that plant will be the competence center for this high-volume series. In order to facilitate an increase in production volumes of about 20 percent at the Bremen plant as of the year 2014, the assembly of the SL premium roadster will be transferred to Sindelfingen in that year. The expanded production of the C-Class will protect the jobs of the workforce in Bremen.

The central production of Mercedes-Benz compact cars will be at the Rastatt plant, as in the past.

Active employment protection and optimal organization of production

By optimizing the allocation of resources in our production network, by strengthening the competencies of the respective sites, and by means of alternative working arrangements, employees will be provided with a clear and stable outlook for the future.

The personnel concept for the Sindelfingen plant will allow the employment effects resulting from the reorganization of C-Class production as of 2014 to be considerably offset by the assembly of the SL. As part of various initiatives, the remaining approximately 1,800 employees affected will be offered attractive employment opportunities. With those measures, employment of the Sindelfingen C-Class employees can be maintained.

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