Michael Brecht is replacing Erich Klemm as deputy chairman of Daimler’s supervisory board. Daimler said in a statement that Klemm has stepped down from his role and will commence a period of part-time work to prepare for his early retirement. Klemm is known as a vocal critic to cutbacks at Daimler and was responsible having cost-cutting expert Wolfgang Bernhard reassigned as a condition for backing a contract extension for chief executive Dieter Zetsche.
Brecht has been a member of the supervisory board since 2012 and was named as chairman of Daimler's general works council on April 2. He has also been a member of the works council at Mercedes’ Gaggenau site in Germany, since 1990, and its chairman since 1998.
Zetsche is currently implementing his cost-cutting program at Daimler, and in the process has engaged against Klemm and the carmaker’s unions. Analysts have remarked that Daimler needs to implement more cuts to make its Mercedes-Benz unit profitable enough to rival Audi and BMW.
In 2013, Mercedes-Benz Cars -- including the Smart brand -- had a return on sales of 6.5 percent, compared with Audi's 10.1 percent and BMW's 9.4 percent. Klemm’s aides said the supervisory board decided unanimously to transfer Bernhard from Mercedes to Daimler’s truck unit.
Sources privy with the negotiations, however, told Reuters that Klemm stipulated that union officials would only approve Zetsche’s contract extension if Bernahrd is transferred from Mercedes. Bernhard had fought with Klemm over how to revamp output at Mercedes’ Sindelfingen site to cut production time per vehicle from an average of 60 to just to 30 hours.
On the other hand, Daimler named Ergun Lumali to replace Klemm as an ordinary member on the board. Lumali currently serves as deputy chairman of the works council at Daimler and chairman of the works council at Mercedes’ Sindelfingen site in Germany.