German news sources are reporting that the Daimler AG will have a significant loss of earnings for Q1 of 2009. “We intend to remain a strong company also in times of weak markets,” states Dr. Dieter Zetsche at the Annual Meeting. Daimler intends to manage the crisis means of rigid cost management, reduced labor costs and reduced working capital, which means that layoffs will officially be considered to cut cost.
In the first quarter of 2009, Daimler drastically intensified the actions introduced last autumn to reduce the costs of business travel, consultancy fees and general overheads. Wage rises have been limited to the portion specified by the collective bargaining agreement, while executives have had to accept substantial salary reductions of nearly 30%. According to Dr. Dieter Zetsche, automobile markets will not pass through the worst of the recession until the second half of 2009 at the earliest. Let us all hope and pray that he is right and that we will soon hit the bottom. The faster we hit bottom of this economic crisis, the faster we can rebuild the economies and enjoy life like we did in the mid 90’s