Mercedes-Benz truck plants reducing employee hours

Muamer Hodzic March 12, 2009

Short-time work will take effect at the Mercedes-Benz truck plants of Daimler AG. The short-time work is scheduled to begin after Easter, but by May at the latest. With this change the company is responding to the continuing weak demand and declining level of incoming orders related to current market conditions.

They will be expiring temporary contracts, ending fixed-term contracts and using up the ample balances of well-stocked working time accounts. In the meantime, an extensive reduction of demand by consumers has created conditions for introduction of short-time work, which will primarily affect production and production-related areas. We’ve reported on this before, but it essentially means is that employees will either work less hours in a day or work less days in a week.

Demand continues to be at a high level for special vehicles such as the Unimog and the Mercedes-Benz Econic, and for Mercedes-Benz and Setra buses. This is why the move to short-time work does not affect employees in these segments.

The specific terms and conditions of short-time work are subject to employee codetermination and specified by means of works agreements between plant management and labor councils at the locations. The works agreements are concluded on basic principles but not in details. The works agreements call for short-time work to initially be in effect until the end of the summer holidays in 2009. The detailed plans for the short-time working days are made together with the works council in correlation to the incoming orders on a monthly basis. From today’s perspective, approximately 18,000 employees at the Wà¶rth, Gaggenau, Kassel, and Mannheim truck plants will be subject to short-time work or to shut down days.

Employees with positive working time accounts have to reduce these accounts first before they start with short-time work. For employees with negative working time accounts the arrangements for short-time work are effective right away.

Employees working short-time at the truck plants in Germany are subject to the same remuneration stipulations as are in effect in the Daimler AG passenger car plants in Germany. In Baden-Württemberg the remuneration is specified by the terms of the collective bargaining agreement for the metalworking and electrical industry. It allots a subvention from the company to the reduced remuneration and short-time work compensation. Daimler AG pays a supplement agreed within the company in plants located outside of Baden-Württemberg where such a regulation for supplements is not agreed in respective bargaining agreements.

Specific measures for each plant

Employees at the Mercedes-Benz plant in Wà¶rth will be working short-time from May 4, 2009 likely until the end of the summer holidays in 2009. The preliminary indication is that about 7,500 employees will be on short-time work schedules. Employees working on production of special vehicles, e. g. in the assembly of the Unimog and the Mercedes-Benz Econic, are not subject to short-time work due to a high level of orders for these vehicles.

The Mercedes-Benz plant in Gaggenau is, among other things, Daimler Trucks’ worldwide supplier of commercial vehicles transmissions. Approximately 3,800 employees will be working short-time from April 22, 2009 until the end of the summer holiday in 2009. In addition, the location produces passenger car parts for Rastatt and for vans. Around 700 employees in these areas have already been working short-time since March 1, 2009.

Axles, transmissions and components for trucks, trailers, vans and passenger cars are produced at the Mercedes-Benz location in Kassel. About 1,300 employees in the truck areas will be working short-time from April 14, 2009 likely until August 31, 2009. In the van-related areas 550 employees have been working short-time since March 1, 2009.

The Mercedes-Benz truck plant in Mannheim produces engines. From April 6, 2009 short-time work will be in effect for roughly 3,500 employees, with the short-time period initially expected to end in September, 2009. The employees of the Competence Center for Zero Emission Commercial Vehicles at this location and the employees of the Mercedes-Benz bus plant in Mannheim are not affected by any short-time work measures.

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