Mercedes Reduces Costs at German Factory

09/25/96

Reuters has reported that German vehicle maker Mercedes-Benz AG said it has reached a pact on cost-cutting measures that aim to save millions of dollars at its Kassel factory with 2,800 workers .

Mercedes said workers agreed to 5 percent wage cut for four years, beginning in January 1996. The workers also agreed to more flexible working hours. The Kassel plant makes axles for Mercedes' commercial vehicles.

For their part, Mercedes promised not to lay off any workers at the facility through the end of the year 2000. Mercedes estimates its cost savings from the pact at the Kassel factory at up to $16 million each year. Across Mercedes' entire commercial vehicle division, the firm aims to cut $662 million annually.

Half of the commercial division's cost savings are expected to come from the introduction of the new Actros lorry, which is being unveiled this week at the IAA truck exhibition in Hanover.

Mercedes is still conducting negotiations at Mercedes' other German commercial vehicle factories, which are located in the cities of Woerth and Mannheim.

Paul Dever -- The Auto Channel