Mercedes Officially Announces 8,500 Job Cuts

Mercedes Eliminates 8,500 Jobs

Posted By eMercedesBenz.com on September 28, 2005 

In a news conference today, Mecedes has announced they will be  
cutting 8,500 jobs from its German workforce.  This number is up from  
the original prediction of 5,000 jobs we reported earlier.

The job cuts, which represent 8% of Mercedes' workforce, will come  
via voluntary termination agreements, and will cost the company an  
estimated $1.1 billion. Despite the charges, the Mercedes Car Group  
believes the expenses will be compensated by extraordinary income and  
improvement in the ongoing operating business, and Daimler Chrysler  
has maintained its profit forecast for 2005 fiscal year.

You can check out the full press release below.

OFFICIAL PRESS RELEASE

Headcount Reductions At Mercedes Car Group In Germany

Stuttgart, Sep 28, 2005

Today, the Board of Management of DaimlerChrysler AG has set a  
reduction target of 8,500 jobs for the Mercedes Car Group Business  
Division. The Supervisory Board has authorized the Board of  
Management for the provision of the required funds.

The headcount reductions are to be achieved in the course of the next  
twelve months by means of voluntary termination agreements. These  
headcount reductions are indispensable. They will contribute to  
significant improvements in the competitiveness of Mercedes-Benz  
through an increase in productivity. This and the attractive Mercedes- 
Benz product range are two major requirements for the long-term  
success of Mercedes Car Group. The measures will also contribute to  
the sustained safeguarding of production at the location Germany.

DaimlerChrysler continues to stand by the “Future Safeguarding 2012“  
agreement signed in 2004 without reservations; in the case of  
headcount restructuring measures, the agreement provides for  
voluntary terminations as a first step. All arrangements of the  
agreement negotiated with the employee representatives are being  
implemented on a consistent basis.

The decision of the Board of Management and the Supervisory Board  
will lead to charges of €950 million. The major portion of the  
charges will be posted in the fourth quarter of 2005. The charges are  
to be compensated by extraordinary income as well as from  
improvements in the ongoing operative business. Therefore, the profit  
outlook for the Group for the year 2005 remains unchanged:  
DaimlerChrysler continues to expect a slight increase in operating  
profit compared with the prior year (€5.8 billion), excluding charges  
related to the realignment of the smart business model.

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