Daimler CEO warns of ‘drastic’ pay cuts, deeper restructuring

FRANKFURT — Daimler CEO Ola Kallenius said the maker of Mercedes-Benz vehicles and the sector as a full faces painful cutbacks to defeat the economic fallout of the COVID-19 pandemic.

The virus outbreak will drive suppliers to do a lot more major restructuring than they planned right before the disaster erupted, Kallenius said Wednesday throughout a webcast hosted by the German manufacturer’s main labor union, IG Metall.

The “significantly harsher reality” for the sector subsequent COVID-19 will necessitate “drastic” income cuts, with Daimler executives dealing with more substantial reductions than rank-and-file personnel, Kallenius said. The changes are vital to guard Daimler’s economical situation and safeguard massive investments in foreseeable future technologies, he said.

The virus outbreak shuttered factories and showrooms across the world, exacerbating Daimler’s wrestle to execute a deep restructuring introduced final 12 months. Kallenius indicated in April that the planned measures could possibly not be enough in light of the dramatic industry contraction. The company and its peers Volkswagen Group and BMW are bracing for next-quarter losses.

Daimler’s program issued in November known as for reducing its workforce by a lot more than ten,000 to slash one.4 billion euros ($one.six billion) from staff paying by 2022. One more ten,000 work could be axed as a result of 2025, Automobilwoche, a sister publication to Automotive News, noted final month, citing unknown company sources. Daimler, which experienced about 299,000 employees at the close of 2019, known as the report speculation.