Daimler is planning to invest EUR1.5 billion ($2 billion) through 2020 to upgrade its Sindelfingen site in Germany, after it workers green-lighted more flexible working terms. The site – which builds Mercedes-Benz’s S-class sedan, the CLS coupe and its wagon-like shooting brake variant, as well as the current E class – is expected to get at least EUR100 million in savings thanks to the labor agreement, which allows the carmaker to have more flexibility to assign production shifts, especially when ramping up and phasing out a model, Daimler said in a statement.
Chief executive Dieter Zetsche said in the statement that the deal combines investments for the future with the necessary savings, adding that it allows the carmaker to strengthen Sindelfingen's position and secure jobs.
The investment will result to a new body shop, paint shop and logistics center at the Sindelfingen site. It would also result to another assembly hall for the next version of the E-class sedan.
The site, currently employing 22,000 people, will offer permanent contracts to around 100 temporary workers, Daimler said.
The modernization of the Sindelfingen site is part of Zetsche's strategy to hike operating profit at Mercedes to 10 percent of revenue in order outgrow those of BMW and Audi by the end of the decade. Likewise, Zetsche is aiming to have Mercedes become the biggest-selling luxury car brand by 2020. [source: Bloomberg]