DaimlerChrysler to cut 8,500 jobs
09-28-05, 12:10 PM
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DaimlerChrysler to cut 8,500 jobs
DaimlerChrysler to cut 8,500 jobs
Staff and agencies
28 September, 2005
By Michael Shields, European Auto Correspondent 14 minutes ago
FRANKFURT - DaimlerChrysler on Wednesday offered staff at its premium division Mercedes Car Group voluntary redundancy packages that aim to cut 8,500 jobs in high-cost Germany over 12 months.
The world‘s fifth-biggest carmaker said the move to sharpen its competitive edge would cost 950 million euros, which it will offset with extraordinary income and efficiency gains and partly finance from existing reserves.
(That's more than a million U.S. dollars PER EMPLOYEE
and note that it's voluntary - because you can't actually lay off anyone in Germany.)
The group reiterated its forecast for a slight rise in operating profit this year, excluding charges to restructure its Smart minicar business, from the 5.8 billion euros it posted in 2004.
The jobs move underscores German carmakers‘ attempts to cut manufacturing costs and boost profitability while paying the highest labor costs in the global auto industry.
The Mercedes division employed around 105,000 staff at the end of last year, of which some 94,000 were in Germany.
"These headcount reductions are indispensable. They will contribute to significant improvements in the competitiveness of Mercedes-Benz through an increase in productivity," the company said in a statement. "The measures will also contribute to the sustained safeguarding of production (in) Germany."
The IG Metall metalworkers union complained that what it said were "painful" cuts focused too much on savings and not enough on promoting new products that would use up excess capacity.
Volkswagen on Tuesday struck a deal with staff to make a new compact sport utility vehicle at its main German plant in Wolfsburg -- securing some 1,000 jobs -- in exchange for pay rates below what VW brand workers normally earn.
DaimlerChrysler and its works council struck a deal last year that guaranteed no worker at its German plants would be laid off through the end of 2011 in exchange for concessions that generate 500 million euros in annual savings from 2007.
Dieter Zetsche, who left the group‘s revived U.S. arm Chrysler this month to run Mercedes and will become group CEO in January, has stuck to his predecessor‘s goal of doubling the Mercedes division‘s operating margin to 7 percent by 2007.
"I am more optimistic than before that Mercedes will hit its targets by 2007," said Merck Finck analyst Robert Heberger, who has a "buy" rating on the stock.
"Both the number of job cuts and the one-off expenses are higher than I expected, but it is a positive sign that management is taking a hard line," he added.
Mercedes, long the group‘s cash cow, has seen profits collapse this year due to model changeovers, the strong euro, hefty losses at Smart and spending to fix quality problems at crown jewel Mercedes-Benz.
Mercedes made an operating profit of just 12 million euros in the second quarter after restructuring costs for Smart that triggered a 954 million euro first-quarter operating loss.
The division groups the Mercedes-Benz, Smart and luxury Maybach brands.
DaimlerChrysler shares ended up 3.9 percent at 45.65 euros, near a three-year high, in expectation of the job cuts.
"If you look at what‘s performing today in Germany, it‘s DaimlerChrysler as it looks like they are restructuring at a faster pace than the market expected, and this is precisely what the story is about for markets, " said Patrik Schowitz, global equity strategist at HSBC in London.
DaimlerChrysler‘s personnel chief, Guenther Fleig, said the Sindelfingen and Bremen plants would take the brunt of the cuts.
"We think the attractiveness is such that (staff) will take up the offer together with the outplacement counseling we are offering to find a new job," he told a conference call.
(Additional reporting by Christiaan Hetzner in Frankfurt and Marie Maitre in Paris)
Staff and agencies
28 September, 2005
By Michael Shields, European Auto Correspondent 14 minutes ago
FRANKFURT - DaimlerChrysler on Wednesday offered staff at its premium division Mercedes Car Group voluntary redundancy packages that aim to cut 8,500 jobs in high-cost Germany over 12 months.
The world‘s fifth-biggest carmaker said the move to sharpen its competitive edge would cost 950 million euros, which it will offset with extraordinary income and efficiency gains and partly finance from existing reserves.
(That's more than a million U.S. dollars PER EMPLOYEE
and note that it's voluntary - because you can't actually lay off anyone in Germany.)The group reiterated its forecast for a slight rise in operating profit this year, excluding charges to restructure its Smart minicar business, from the 5.8 billion euros it posted in 2004.
The jobs move underscores German carmakers‘ attempts to cut manufacturing costs and boost profitability while paying the highest labor costs in the global auto industry.
The Mercedes division employed around 105,000 staff at the end of last year, of which some 94,000 were in Germany.
"These headcount reductions are indispensable. They will contribute to significant improvements in the competitiveness of Mercedes-Benz through an increase in productivity," the company said in a statement. "The measures will also contribute to the sustained safeguarding of production (in) Germany."
The IG Metall metalworkers union complained that what it said were "painful" cuts focused too much on savings and not enough on promoting new products that would use up excess capacity.
Volkswagen on Tuesday struck a deal with staff to make a new compact sport utility vehicle at its main German plant in Wolfsburg -- securing some 1,000 jobs -- in exchange for pay rates below what VW brand workers normally earn.
DaimlerChrysler and its works council struck a deal last year that guaranteed no worker at its German plants would be laid off through the end of 2011 in exchange for concessions that generate 500 million euros in annual savings from 2007.
Dieter Zetsche, who left the group‘s revived U.S. arm Chrysler this month to run Mercedes and will become group CEO in January, has stuck to his predecessor‘s goal of doubling the Mercedes division‘s operating margin to 7 percent by 2007.
"I am more optimistic than before that Mercedes will hit its targets by 2007," said Merck Finck analyst Robert Heberger, who has a "buy" rating on the stock.
"Both the number of job cuts and the one-off expenses are higher than I expected, but it is a positive sign that management is taking a hard line," he added.
Mercedes, long the group‘s cash cow, has seen profits collapse this year due to model changeovers, the strong euro, hefty losses at Smart and spending to fix quality problems at crown jewel Mercedes-Benz.
Mercedes made an operating profit of just 12 million euros in the second quarter after restructuring costs for Smart that triggered a 954 million euro first-quarter operating loss.
The division groups the Mercedes-Benz, Smart and luxury Maybach brands.
DaimlerChrysler shares ended up 3.9 percent at 45.65 euros, near a three-year high, in expectation of the job cuts.
"If you look at what‘s performing today in Germany, it‘s DaimlerChrysler as it looks like they are restructuring at a faster pace than the market expected, and this is precisely what the story is about for markets, " said Patrik Schowitz, global equity strategist at HSBC in London.
DaimlerChrysler‘s personnel chief, Guenther Fleig, said the Sindelfingen and Bremen plants would take the brunt of the cuts.
"We think the attractiveness is such that (staff) will take up the offer together with the outplacement counseling we are offering to find a new job," he told a conference call.
(Additional reporting by Christiaan Hetzner in Frankfurt and Marie Maitre in Paris)
09-28-05, 12:29 PM
#3
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Even if they paid you a fortune, never work in Germany, I and my fellow expats never met such uncaring bosses in my life. Their logic could never sink in with reality.
Mexico is a much more delightful place.
Mexico is a much more delightful place.
09-28-05, 01:57 PM
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Delphi sets deadline for GM, union By Sharon Silke Carty, USA TODAY
Wed Sep 28, 7:00 AM ET
Delphi, the world's second-largest automotive supplier, has made it clear to General Motors and its labor union that it wants to know by Oct. 17 whether it will get what it needs to stay out of bankruptcy court.
Delphi, which reported a net loss of $338 million in its most recent quarter, is trying to get the United Auto Workers union to agree to several cost-cutting maneuvers, such as eliminating the bank of 4,000 idle workers who continue to draw paychecks. Delphi is also hoping GM, its former parent company and largest customer, will help foot some of its restructuring costs.
The deadline for the decisions is Oct. 17 because that's when federal bankruptcy rules change, making it potentially harder for companies to operate under bankruptcy-court protection.
CEO Robert "Steve" Miller, who joined the company in June, "doesn't need a definite set-in-stone deal" by Oct. 17, says spokeswoman Claudia Baucus. "He needs to have confidence in where the discussions are going to go to weigh that with the risk of going beyond that date."
The uncertainty has many in the supplier community on pins and needles. If Delphi files for bankruptcy protection, many companies that sell parts to Delphi could see their credit lines tighten, says Jim Gillette, an analyst at CSM Worldwide. That's because banks might lose confidence in the smaller supplier's ability to get payments from Delphi.
"All the suppliers are extremely nervous. They stand to lose a considerable amount of cash," Gillette says. "This is going to be a decision Miller makes on his own based upon where he's at. ... How do you predict a decision like that?"
Miller is no stranger to bankruptcy court. He was CEO of Bethlehem Steel for three weeks in 2001 before filing for Chapter 11 bankruptcy-court protection. He shut down the steel company's pension plan and took health care away from retirees before selling the company to investor Wilbur Ross.
Brian Johnson, an analyst at Sanford C. Bernstein, says Delphi will be leaning heavily on its union to accept job cuts, reduced wages, factory closures and the elimination of medical benefits after retirement. Many of Delphi's blue-collar workers are paid the same wages and get the same benefits as GM workers, which makes their compensation as much as three times higher than workers at other suppliers, says Delphi spokeswoman Baucus.
"Union leaders are in an uncomfortable political position," Johnson wrote recently. If they agree to concessions, the union will likely be dealing with unhappy members. But if Delphi files for reorganization in bankruptcy court, "the union would lose jobs, see wages cut, miss out on severance payouts for layoffs/early retirements, and put GM benefits at risk."
Meanwhile back at GM and their witless progeny, Delphi has 4,000 furloughed workers who continue to draw paychecks. Just look for the union label on the bankruptcy filing unless the General, proving it does learn from its mistakes and can now repeat them down to the smallest detail, actually does give Delphi a big check to bail them out on the way to their own bankruptcy. Why is it some of the auto makers are starting to look just like airlines?
Wed Sep 28, 7:00 AM ET
Delphi, the world's second-largest automotive supplier, has made it clear to General Motors and its labor union that it wants to know by Oct. 17 whether it will get what it needs to stay out of bankruptcy court.
Delphi, which reported a net loss of $338 million in its most recent quarter, is trying to get the United Auto Workers union to agree to several cost-cutting maneuvers, such as eliminating the bank of 4,000 idle workers who continue to draw paychecks. Delphi is also hoping GM, its former parent company and largest customer, will help foot some of its restructuring costs.
The deadline for the decisions is Oct. 17 because that's when federal bankruptcy rules change, making it potentially harder for companies to operate under bankruptcy-court protection.
CEO Robert "Steve" Miller, who joined the company in June, "doesn't need a definite set-in-stone deal" by Oct. 17, says spokeswoman Claudia Baucus. "He needs to have confidence in where the discussions are going to go to weigh that with the risk of going beyond that date."
The uncertainty has many in the supplier community on pins and needles. If Delphi files for bankruptcy protection, many companies that sell parts to Delphi could see their credit lines tighten, says Jim Gillette, an analyst at CSM Worldwide. That's because banks might lose confidence in the smaller supplier's ability to get payments from Delphi.
"All the suppliers are extremely nervous. They stand to lose a considerable amount of cash," Gillette says. "This is going to be a decision Miller makes on his own based upon where he's at. ... How do you predict a decision like that?"
Miller is no stranger to bankruptcy court. He was CEO of Bethlehem Steel for three weeks in 2001 before filing for Chapter 11 bankruptcy-court protection. He shut down the steel company's pension plan and took health care away from retirees before selling the company to investor Wilbur Ross.
Brian Johnson, an analyst at Sanford C. Bernstein, says Delphi will be leaning heavily on its union to accept job cuts, reduced wages, factory closures and the elimination of medical benefits after retirement. Many of Delphi's blue-collar workers are paid the same wages and get the same benefits as GM workers, which makes their compensation as much as three times higher than workers at other suppliers, says Delphi spokeswoman Baucus.
"Union leaders are in an uncomfortable political position," Johnson wrote recently. If they agree to concessions, the union will likely be dealing with unhappy members. But if Delphi files for reorganization in bankruptcy court, "the union would lose jobs, see wages cut, miss out on severance payouts for layoffs/early retirements, and put GM benefits at risk."
Meanwhile back at GM and their witless progeny, Delphi has 4,000 furloughed workers who continue to draw paychecks. Just look for the union label on the bankruptcy filing unless the General, proving it does learn from its mistakes and can now repeat them down to the smallest detail, actually does give Delphi a big check to bail them out on the way to their own bankruptcy. Why is it some of the auto makers are starting to look just like airlines?
09-28-05, 02:59 PM
#5
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Originally Posted by RON430
Delphi, which reported a net loss of $338 million in its most recent quarter, is trying to get the United Auto Workers union to agree to several cost-cutting maneuvers, such as eliminating the bank of 4,000 idle workers who continue to draw paychecks.
09-28-05, 03:12 PM
#6
Lexus Champion
Originally Posted by Lexmex
Even if they paid you a fortune, never work in Germany, I and my fellow expats never met such uncaring bosses in my life. Their logic could never sink in with reality.
Mexico is a much more delightful place.
Mexico is a much more delightful place.
09-28-05, 03:19 PM
#7
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If u thought the obvious Benz cost cuttting was already bad, these next batch of cars will be worse. From my understanding, they HAVE to seriously cut costs, which means more sharing, cheaper parts, etc.
Very sad, very sad. What is odd, is Benzs are already, very expensive compared to the competiton, but sales have not been brisk.
I wish they would concentrate on a core, instead of this constant expanding. The R class is totally unnecessary.
Very sad, very sad. What is odd, is Benzs are already, very expensive compared to the competiton, but sales have not been brisk.
I wish they would concentrate on a core, instead of this constant expanding. The R class is totally unnecessary.
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09-28-05, 05:33 PM
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Good thing Germans are mostly hard working people, can you imaging this kind of policy in the US? All the companies including mine will be in deep trouble...most likely out of business.
09-28-05, 06:20 PM
#10
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Originally Posted by 1SICKLEX
If u thought the obvious Benz cost cuttting was already bad, these next batch of cars will be worse. From my understanding, they HAVE to seriously cut costs, which means more sharing, cheaper parts, etc.
I wish they would concentrate on a core, instead of this constant expanding. The R class is totally unnecessary.
I wish they would concentrate on a core, instead of this constant expanding. The R class is totally unnecessary.
Now...as to cost-cutting, M-B does not have to cut costs by cutting quality. Even considering Germany's higher average labor costs than South Korea's, it is possible to have quality and a well-made vehicle while keeping costs under control......Hyundai and Kia have proved that in recent years, which you yourself have seen.
If M-B is serious about cutting costs while improving quality, IMO it can start in three places.
First, it can stop putting super-expensive hand-built engines with insane amounts of power in the AMG series. Every AMG engine is hand-built by ONE factory technician who spends many hours assembling it and testing it. Those skilled engine builders don't make chump change.....I assure you. When he / she is satisfied with it, the engine block receives a plate with that technician's personal signature on it. ( Same with the Mustang Cobra....a much cheaper car, but a much less-sophisticated engine too ).
Second, it can stop putting untested and unreliable electronic toys into their vehicles and go back to what made them famous to start with.....a tank-like structure and doors with the solidity of a bank vault, hardware that does not literally fall off in your hands ( some new M-B shifter handles and glovebox doors do exactly that ) , and vehicle systems that allow the driver to drive the vehicle rather than have the vehicle literally drive itself with T/C, Lane Change buzzers, Brake Assist, VSC, EBD, and just about every electronic alphabet-combo you can think of. Build a strong, safe car and let people DRIVE.
Third, it can start to send lower-priced and decontented models here to the U.S. for sale like it does in Germany. ( Does the A-Class come to mind?
) In Europe you can buy lower-priced and decontented M-B products that are much cheaper to produce. For instance, just try and find a new M-B in America without leather seats....a few C230 Hatchbacks were sold that way, and that's about it. Not everyone likes or wants leather....and cloth does have some advantages.Yes....the traditional arguements against this....and I am well-aware of them..... was that it would hurt M-B's image in America. But images can and DO change. As I said above, Hyundai and Kia proved that.
Last edited by mmarshall; 09-28-05 at 06:24 PM.
09-28-05, 07:47 PM
#11
Lexus Test Driver
? didnt know that i work for lake norma chrysler jeep dodge, and he havent really been seeling that many cars lately and they have already reduced my hours (sucks) whats next for me termination?
09-29-05, 05:49 AM
#12
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Originally Posted by 1SICKLEX
If u thought the obvious Benz cost cuttting was already bad, these next batch of cars will be worse. From my understanding, they HAVE to seriously cut costs, which means more sharing, cheaper parts, etc.
What is odd, is Benzs are already, very expensive compared to the competiton, but sales have not been brisk.
I wish they would concentrate on a core, instead of this constant expanding. The R class is totally unnecessary.
The problem for MB and any car line is it looks weak if it doesn't compete in a segment. The "I'm very much like a minivan but don't call me one" segment is hot right now. The other problem is that global tastes vary pretty widely so a smaller offering may not satisfy enough customers worldwide.
Heck even Porsche is expanding. An SUV, a new coupe, and a 4 door soon.
But MB is hopefully ACTUALLY addressing quality issues, not just talking about it. Time will tell...
09-29-05, 06:30 AM
#13
Super Moderator
Originally Posted by mmarshall
IThird, it can start to send lower-priced and decontented models here to the U.S. for sale like it does in Germany. ( Does the A-Class come to mind? ) In Europe you can buy lower-priced and decontented M-B products that are much cheaper to produce. For instance, just try and find a new M-B in America without leather seats....a few C230 Hatchbacks were sold that way, and that's about it. Not everyone likes or wants leather....and cloth does have some advantages.
Yes....the traditional arguements against this....and I am well-aware of them..... was that it would hurt M-B's image in America. But images can and DO change. As I said above, Hyundai and Kia proved that.
) In Europe you can buy lower-priced and decontented M-B products that are much cheaper to produce. For instance, just try and find a new M-B in America without leather seats....a few C230 Hatchbacks were sold that way, and that's about it. Not everyone likes or wants leather....and cloth does have some advantages.Yes....the traditional arguements against this....and I am well-aware of them..... was that it would hurt M-B's image in America. But images can and DO change. As I said above, Hyundai and Kia proved that.
09-29-05, 09:38 AM
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I know this is hijacking the thread from what bit orginally started but merc is not alone in problems in their "core" business. Besides GMs other purely automotive problems, the bill is coming due for those union negotiation cave ins from their management. GMs race to the bottom was to think about the future as little as possible as long as they could capitalize on markets today. Businesses in the US today are run on a quarter to quarter basis in most instances. I talk to senior management in large companies almost monthly now that tell me their view of R&D is anything that results in a product at most six months from now. So merc, and bimmer, and Lexus, et. al., spend a lot more time on how to increase profits and sales in the next quarter.
So bimmer and merc and Lexus have all gone through a transformation of their business from luxury sedans to trucks. Do soccer moms need, or really want, truck frames, off road suspensions, and 4 wheel drive (as opposed to weather but not off road friendly AWD)? I doubt it. But one of the lingering effects of first the muscle car bubble pop and then the first gasoline crisis, was lighter more fuel efficient cars that were woefully short of space if you need to haul anything. And of course women spend a lot more time worrying about the safety of their flock and there is nothing like three tons of spute to make you feel like you are doing everything you can to protect, and isolate, the pre ritalin calmed rug rats bouncing off the walls in the back seat. And lets not leave the testosterone deprived urban cowboys out of the loop. When muscle cars got to the point of having well under 200hp and car prices started to escalate there was a move to the automotive fashion of proving "mine is bigger than yours" with your jacked up 4X4 that often went off roading only in Home Depot parking lots. And of course there are a lot of women and men out there that could care less whether you can see around them in their spute as long as they can see over you in your car.
Now, a couple of hurricanes have proven a tipping point. Isn't it amazing how everyone can't wait for gasoline prices to go down now that we are post Katrina/Rita? The fact that we have unlimited demand for a natural resource that exists in a finite supply just doesn't seem to enter most tiny little minds. Whether they are tanking up a hemi pick up or 500hp M5. I can't say I disagree with the R class. It is an experiment and indicates that merc is trying something that not bimmer, or jag, or audi, or infiniti, or Lexus has decided to try - a luxury mini van. Before you get the scalpels out to demonstrate how wrong I am calling the R class a luxury mini van, please don't bother. I finally saw one. It really is academic where the control arms came from or the glove box or gear shift ****, most people are going to look at it and tag it a luxury mini van. And maybe it makes a lot more sense if you have to haul people and things around than a spute or wagon, both of which merc makes. But how do you keep the traditional merc buyer while keeping the sales increasing? I doubt it will be through decontenting. Merc buyers are brand shopping. The same can be said for bimmer and Lexus as well as most other luxo brands. We can all get from A to B spending a lot less money than what a Lexus costs.
But the ills that merc has go well beyond just sales increases. I have to agree 100% on reliability and build quality. The last merc I had ordered, I walked away from because it just was not as well built as I thought it should be for the price I would have had to pay. Fortunately the dealer had a big list of people who would take it so I was out nothing. As for reliability, if merc doesn't get a handle on it, particularly with new models which is where the germans uniformly fall down, they have a very tough row to hoe. As for the quality of german engineering, it hasn't impressed me, if it ever has. And as for german workers, since the wall came down, low cost and less trained workers have flooded into Germany and other countries and took over a lot of these jobs. The german workers just went on their welfare. If you don't believe this, read about what is going on in Germany with their elections right now.
The bimmer and merc horsepower wars? They will go on but only in the ever decreasing sales volume models IMO. WIll americans buy 725s and S 280s? Probably not. So how does merc increase profits without increasing sales? Cutting costs? How much more profits can you wring out by sliding development, going to lower labor grade mfr. areas, and cheapening up materials? Stay tuned. Will I go pay 100 large for a poorly constructed, unreliable, vehicle built using lower quality materials if it has a three pointed star on the hood? I didn't three years ago and I can't see that changing now.
So the management orientation of increasing next quarters numbers to the exclusion of anything else has the auto makers, like a lot of industries, in a race to the bottom. And a lot of people are going to lose their jobs and pensions, deserved or not, so that ever fewer numbers of people who are able to fund their fantasies can buy vehicles with imagined heritages but less and less substance. Just remember, with apologies to our international friends, it is still the American consumer that funds much of the world economy. And we have been on a world class run for a long time.
So bimmer and merc and Lexus have all gone through a transformation of their business from luxury sedans to trucks. Do soccer moms need, or really want, truck frames, off road suspensions, and 4 wheel drive (as opposed to weather but not off road friendly AWD)? I doubt it. But one of the lingering effects of first the muscle car bubble pop and then the first gasoline crisis, was lighter more fuel efficient cars that were woefully short of space if you need to haul anything. And of course women spend a lot more time worrying about the safety of their flock and there is nothing like three tons of spute to make you feel like you are doing everything you can to protect, and isolate, the pre ritalin calmed rug rats bouncing off the walls in the back seat. And lets not leave the testosterone deprived urban cowboys out of the loop. When muscle cars got to the point of having well under 200hp and car prices started to escalate there was a move to the automotive fashion of proving "mine is bigger than yours" with your jacked up 4X4 that often went off roading only in Home Depot parking lots. And of course there are a lot of women and men out there that could care less whether you can see around them in their spute as long as they can see over you in your car.
Now, a couple of hurricanes have proven a tipping point. Isn't it amazing how everyone can't wait for gasoline prices to go down now that we are post Katrina/Rita? The fact that we have unlimited demand for a natural resource that exists in a finite supply just doesn't seem to enter most tiny little minds. Whether they are tanking up a hemi pick up or 500hp M5. I can't say I disagree with the R class. It is an experiment and indicates that merc is trying something that not bimmer, or jag, or audi, or infiniti, or Lexus has decided to try - a luxury mini van. Before you get the scalpels out to demonstrate how wrong I am calling the R class a luxury mini van, please don't bother. I finally saw one. It really is academic where the control arms came from or the glove box or gear shift ****, most people are going to look at it and tag it a luxury mini van. And maybe it makes a lot more sense if you have to haul people and things around than a spute or wagon, both of which merc makes. But how do you keep the traditional merc buyer while keeping the sales increasing? I doubt it will be through decontenting. Merc buyers are brand shopping. The same can be said for bimmer and Lexus as well as most other luxo brands. We can all get from A to B spending a lot less money than what a Lexus costs.
But the ills that merc has go well beyond just sales increases. I have to agree 100% on reliability and build quality. The last merc I had ordered, I walked away from because it just was not as well built as I thought it should be for the price I would have had to pay. Fortunately the dealer had a big list of people who would take it so I was out nothing. As for reliability, if merc doesn't get a handle on it, particularly with new models which is where the germans uniformly fall down, they have a very tough row to hoe. As for the quality of german engineering, it hasn't impressed me, if it ever has. And as for german workers, since the wall came down, low cost and less trained workers have flooded into Germany and other countries and took over a lot of these jobs. The german workers just went on their welfare. If you don't believe this, read about what is going on in Germany with their elections right now.
The bimmer and merc horsepower wars? They will go on but only in the ever decreasing sales volume models IMO. WIll americans buy 725s and S 280s? Probably not. So how does merc increase profits without increasing sales? Cutting costs? How much more profits can you wring out by sliding development, going to lower labor grade mfr. areas, and cheapening up materials? Stay tuned. Will I go pay 100 large for a poorly constructed, unreliable, vehicle built using lower quality materials if it has a three pointed star on the hood? I didn't three years ago and I can't see that changing now.
So the management orientation of increasing next quarters numbers to the exclusion of anything else has the auto makers, like a lot of industries, in a race to the bottom. And a lot of people are going to lose their jobs and pensions, deserved or not, so that ever fewer numbers of people who are able to fund their fantasies can buy vehicles with imagined heritages but less and less substance. Just remember, with apologies to our international friends, it is still the American consumer that funds much of the world economy. And we have been on a world class run for a long time.
09-29-05, 12:51 PM
#15
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More expensive than Lexus and Infiniti yes, but not more expensive than BMW in general. Common thread? GERMAN LABOR COSTS. They both have U.S. plants now though which are helping to make them more compettiive, but as we all know, the Alabama MB plant produced some crappy quality vehicles to start with.
I have friends with MLs down here who still refuse to believe me when I tell them their cars are made in Alabama. A neighbor with 2 X5s also did not believe me when I told him X5s came from South Carolina. They keep thinking I am confusing Alabama with Alemania (Germany in Spanish).
I have friends with MLs down here who still refuse to believe me when I tell them their cars are made in Alabama. A neighbor with 2 X5s also did not believe me when I told him X5s came from South Carolina. They keep thinking I am confusing Alabama with Alemania (Germany in Spanish).