Daimler reaches deal with labor to sell some Mercedes-Benz dealerships

Article by Christian A., on August 2, 2014

Daimler has struck a deal with labor representatives allowing it to divest some company-owned Mercedes-Benz dealerships in Germany as the carmaker bids to revamp its sales network in its home turf. As part of the agreement, Daimler vowed not to implement any mass firings until 2023 as well as to invest EUR500 million ($670 million) in sales outlets in the next few years.

As part of the revamp, the sales network will be packaged with regional distribution centers as of 2015. Showrooms for passenger cars and commercial vehicles, on the other hand, will be separated.

Daimler’s drive to shrink its wholly owned retail organization in Germany is part of an effort by its chief executive -- Dieter Zetsche -- to hike the operating profit of Mercedes carmaking division's to 10 percent of revenue. Ilse Kestin, an IG Metall union representative, said in April that Daimler’s sales organization could only churn out up to a 2 percent margin.

Zetsche is aiming for Mercedes to surpass rivals BMW and Audi to become the best-selling and most profitable luxury car brand by 2020. Ola Kaellenius, head of Mercedes sales, said in the statement that the recent deal is a clear commitment to Daimler’s retail organization, which will be “strengthened sustainably and becomes more competitive.

Daimler has also reached a deal over the future of its Sindelfingen site in Germany. Discussions over the matter focused on investments in the site in return for more flexibility on work times and job assignments. [source: automotive news europe - sub. required]

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