Transformation plan for the Mercedes-Benz Untertürkheim Plant: Mercedes-Benz Untertürkheim Plant to Become High-Tech Location

STUTTGART -- March 18, 2015: – Daimler is comprehensively modernizing the Mercedes-Benz plant in Stuttgart-Untertürkheim, and is transforming the location with its rich history into a center of competence for production ranging from highly efficient engines to alternative drive systems. At the same time, the company is investing about one billion euros in Untertürkheim this year. The plant’s management and its works council have agreed on a package of measures that will safeguard the location's competitive position and employment levels for years to come. The number of vocational training positions will also be increased by a total of 150 for five years starting from 2016.

This agreement will lead to cost savings in the range of hundreds of millions of euros until 2020.

"The transformation plan is a groundbreaking achievement for the Untertürkheim plant and its employees. We are not only improving our flexibility and efficiency, but also developing a plant with a tradition stretching back over 110 years into a high-tech location for CO2 technologies," said Markus Schäfer, Member of the Divisional Board Mercedes-Benz Cars, Manufacturing and Supply Chain Management.

The Mercedes-Benz plant in Untertürkheim with approximately 18,700 employees has been operating at high capacity utilization for years. Last year, Mercedes-Benz Cars as a whole set new records with over 1.75 million vehicles produced and more than 1.72 million sold. As part of its Mercedes-Benz 2020 growth strategy, Mercedes-Benz is continuing to plan for significantly rising production volumes in the mid-term, offering stable employment at its Untertürkheim plant for the future as well.

Wolfgang Nieke, Chairman of the Works Council, Mercedes-Benz Untertürkheim plant and Development Passenger Cars: "With this agreement, we are safeguarding the location and its jobs for the future. The agreement contains binding commitments regarding investment, additional production volumes and products, and the production of fuel cell systems as a key technology of the future. This has been one of our aims for years. The structure of the location will change, but the number of jobs will remain stable for many years and working conditions will be maintained. The 150 additional positions in vocational training are a particularly good sign for us."

The Untertürkheim plant will become a center of competence for highly efficient engines, hybrid powertrains and the production of fuel cell systems. From June 1, Untertürkheim will assume responsibility for a facility in Nabern in the greater Stuttgart area where assembly of the fuel cell system will take place. The Nabern facility will remain the center of competence for the overall development of fuel cell drive systems under the direction of Daimler AG. "Alternative drive systems are an important element of our future mobility. Their share of automotive production is set to steadily rise over the next few years, complementing our highly efficient engines within the portfolio. This is what we have laid the groundwork for today," said Schäfer. At Daimler, the electrification of the powertrain has long been on the agenda with regard to the future of mobility. The company already offers a wide range of battery-electric vehicles and hybrids around the world. The PLUG-IN HYBRID will be the front-running technology for the next decade at least. With the S 500 and C 350, a total of ten new Mercedes-Benz PLUG-IN HYBRID models will be on the market by 2017. In addition to introducing more battery-electric models in the next few years, Daimler continues to pursue the aim to bring to market competitive electric vehicles powered by fuel cells - a clear statement for sustainable mobility of the future.

The traditional production of engines, transmissions, axles and components at the Untertürkheim plant will be comprehensively realigned, and further capacities will be added. The focus of the efforts to streamline and modernize the product portfolio is to keep in-house products with competitive relevance and to assign other tasks to suppliers. The foundry in Esslingen-Mettingen and the forge in Untertürkheim are integral parts of the plant and will remain so in the future.

In addition, assembly capacities for engines in Untertürkheim will also be significantly increased. The plant will add to its engine portfolio two new gasoline engines and a new four-cylinder diesel engine. With respect to transmissions, the plant will focus exclusively on the production of automatic transmissions for rear-wheel drive vehicles while building up additional assembly lines over the next few years. Peter Schabert, Head of Powertrain Production and Site Manager Mercedes-Benz Untertürkheim plant: "The plant will thus receive investments amounting into the billions over the next few years for the realignment and modernization of our production."

The powertrain production network of Mercedes-Benz Cars comprises several locations in Germany and other countries. The central location is the Mercedes-Benz plant in Stuttgart-Untertürkheim, which has been in operation for more than 110 years. In its six sub-plants with approximately 18,700 employees in production and administration the core of the automobile is produced: engines, transmissions, axles and related components. The plant is the center of competence in the global powertrain production network of Mercedes-Benz Cars.

The Mercedes-Benz plant in Berlin, Germany, focuses on the development and production of state-of-the-art components and parts, as well as engine production. The Mercedes-Benz plant in Hamburg, Germay, develops and produces axles and axle components, steering columns and components for exhaust technology and lightweight structural components. The MDC Power engine factory in Kölleda, Germany, is a wholly-owned subsidiary of Daimler AG and produces four-cylinder engines for Mercedes-Benz and Mercedes-AMG vehicles.

Further powertrain production capacities are located in other countries. This includes Daimler's Romanian subsidiary Star Transmission for the assembly of transmissions and the production of components and parts, as well as engine plants in Beijing, China as part of a joint venture and the Infiniti plant in Decherd, Tennessee as part of the strategic partnership between Daimler and the Renault/Nissan Alliance.

Mercedes-Benz Cars Operations is responsible for passenger car production at 26 locations around the world as part of a flexible and efficient production network involving more than 70,000 employees. This includes the central functions of planning, logistics and quality. Mercedes-Benz Cars produced more than 1,754,000 Mercedes-Benz and smart passenger cars last year, marking the fourth record in a row.

The network is based on the product architectures of front-wheel drive (compact cars) and rear-wheel drive (for example the S-Class, E-Class, and C-Class) as well as the SUV and sports car architectures. In addition, there is a powertrain production network (engines, transmissions, axles and components). Each of these production networks is grouped around a lead plant that serves as a center of competence for the ramp-up of new products, technology and quality assurance.

The focus of day-to-day work is on the continuous improvement and refinement of state-of-the-art production methods, which allow future high-tech vehicles to be produced in a way that is efficient, flexible and environmentally friendly, according to the typical Mercedes-Benz quality standards. All of this revolves around the employees and their expertise, whose work is systematically supported by ergonomic workplace design and intelligent automation. In addition to its own production plants, Mercedes-Benz is increasingly leveraging partnerships and utilizing capacities at contract manufacturers as part of its growth strategy.