AutoBeta(AutoBeta.net)02/25 Report--

On February 25, media reported that Daimler may cut 4% of its workforce in China in the first and second half of this year, including nearly 100 foreign experts from Beijing Mercedes-Benz. The main reason for layoffs in China is that the cost of foreign workers is nearly 7-8 times higher than that of Chinese employees. It is understood that Mercedes-Benz spends more than 300000 euros (2.2878 million yuan) a year for a German employee in the Chinese market-including wages and a wide variety of subsidies, with an average annual cost of 300000 yuan for a Chinese employee.

Public data show that at present, Beijing Mercedes-Benz has about 100 foreign employees, and according to this calculation, Beijing Mercedes-Benz pays foreign employees more than 2 billion yuan a year. So far, Daimler has not made a relevant response to the matter.

Beijing Mercedes-Benz is known as the "profit cow" of BAIC. At present, most of Beijing Auto's profit sources rely on the contribution of Beijing Mercedes-Benz.

According to the interim results released by Beijing Automobile last year, Beijing Mercedes-Benz's revenue reached 77.807 billion yuan in the first half of last year, an increase of 10.8 per cent over the same period last year and accounting for more than 88 per cent of the total revenue of listed companies.

China is Daimler's largest single market in the world. Mercedes-Benz and smart brands sold 702100 vehicles in China in 2019, an increase of 4% over the same period last year. Despite Daimler's good performance in China, considering the uncertainty in the Chinese market, cutting costs through layoffs has become Daimler's only option.

In fact, Daimler announced layoffs as early as November last year and plans to cut at least 10,000 jobs worldwide by the end of 2022, hoping to cut costs by cutting costs in response to sluggish sales. boost and increase investment rates in electric cars and self-driving technology.

On February 10th, the German Business Daily reported that Daimler plans to increase the number of layoffs from 10, 000 to 15000. Daimler also plans to reduce working hours per week and allow temporary workers in most executive positions to retire early.

On February 20, Daimler announced on its website that it was streamlining the management of its finance, production and development divisions to eliminate duplication of management positions between Mercedes-Benz and Daimler.

Daimler's series of actions show that although we are a world-famous luxury carmaker, we are also having a hard time in the face of the cold winter of the car market.

Daimler accelerated layoffs and streamlined the company's structure, in large part because of a sharp drop in profits. According to Daimler's financial results, the turnover of Daimler Group was 172.7 billion euros in 2019, up 3% from 167.4 billion euros in 2018, but profit before interest and tax was 4.3 billion euros (about 32.7 billion yuan), down 60.4 percent from the same period last year. Net profit was 2.7 billion euros (about 20.5 billion yuan), down 64.5 percent from the same period last year Net profit attributable to shareholders was 2.4 billion euros (18.3 billion yuan), down 66.7 percent from a year earlier.

Daimler's performance in 2019 was not satisfactory, with the biggest decline in a decade, mainly due to the Takata airbag recall and the "emission gate" incident. According to Daimler's preliminary assessment, the costs of payments and court proceedings related to the diesel emissions scandal are 4.024 billion euros (30.6 billion yuan). In addition, Daimler has been overwhelmed by the continued fermentation of the Takata airbag incident. The Takata airbag recall cost Daimler at least 941 million euros (7.1 billion yuan).

With the beginning of the era of electrification and the promotion of self-driving technology, major car companies have cut costs through layoffs, the company's investment in electrification and self-driving technology.

In addition to Daimler Group, Audi and BMW also announced related layoffs. Audi announced that it would cut 9500 jobs by 2025 to support companies accelerating the transition to electrification and digitization, while BMW plans to cut 6000 jobs by 2022 to cope with the cost of electrification and self-driving technology. In addition to BBA, Nissan, Ford, Hyundai and other auto companies have also announced layoffs in order to save costs.

In addition, affected by the epidemic, Daimler will also face a new test this year. Daimler said the epidemic could lead to sluggish global economic growth or even a downturn. Daimler will also face a decline in sales and may pose a threat to manufacturing, procurement and supply chain markets.

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