Mercedes opts to build new city cars in Germany
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.MERCEDES-BENZ will build its small city car in Germany after considering cheaper rival options in Britain, France and the Czech Republic. It said it had succeeded in negotiating the DM200m ( pounds 79m) a year savings needed to make the Rastatt plant in Baden- Wurttemberg competitive with foreign locations.
Helmut Werner, head of Mercedes-Benz, described the choice of Rastatt for the A-series mini, which is to begin production in 1997, as 'a strong signal for Germany as an industrial base and showing the combativeness of our production sites'.
The odds in favour of Rastatt for the new Mercedes were high as the factory is new and under- utilised. But Mercedes played the foreign card to win company-wide concessions from the union. In 1995 and 1996, 1 per cent of the sectoral wage rise will be written off against voluntary supplementary payments. There will be a reduction of between one and three hours in the working week at all Mercedes plants, with an as yet unspecified cut in wages.
With an investment of DM500m, Mercedes plans to produce 200,000 A-cars a year, mainly for the European market. The company, which accounts for two- thirds of turnover at its parent Daimler-Benz and has been losing heavily in a depressed car market, reported a marked improvement since the introduction of its C- class model. Mercedes is the only German maker to have recorded more domestic registrations, at 16 per cent, between July and October than in the same quarter last year.
The A-car decision, a mould- breaking move by the luxury-class manufacturer into the competitive small-car market, came against unprecedented losses in the group. Describing 1993 as the most difficult year since the war, Edzard Reuter, Daimler's chairman, confirmed a nine-month net loss of DM2.1bn under US accounting procedures, adopted as a result of Daimler's listing on the New York stock exchange in October.
Under German accounting methods, which allow the use of hidden reserves to boost results, the group made a nine-month net loss of DM181m. A better indication of Daimler's performance under German rules was a nine- month loss of DM2.3bn. The company has put most of its restructuring charges - nearly DM3bn for 1993 - into the first three quarters of this year, enabling Mr Reuter to forecast improved earnings from now on.
Daimler confirmed yesterday that its major shareholder, Deutsche Bank, will sell 3.2 per cent of its 28.1 per cent stake, worth DM1bn, in the US early next year.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments