More Job Cuts To be Done at Daimler Trucks Brazil
Published On Jun 14, 2016
After announcing 1,240 job cuts in United States and Mexico, world’s largest commercial vehicle manufacturer Daimler trucks is planning to cut 2,000 more jobs, this time in Brazilian market. According the last month’s report which suggested that truck market would fall in 2016 owing to the low demands in United States and Brazil, the company is making these drastic changes.
Speaking at an investor audience, Mr. Wolfgang Bernhard, CEO, Daimler Trucks, said, “2,000 jobs will be axed in Brazil at a cost of about 100 million euros ($114 million) in severance payments, raising the number of jobs it has cut in Latin America's biggest economy to almost 5,000 since last year.” He also did not rule out similar decisions in the near future in case the US truck market shrunk by the expected 15 percent within the coming months.
Employing currently more than 13,700 people in the USA and 11,500 in Brazil, Daimler trucks accounts for around a fifth of total group sales as per last quarter reports. The division, however, is facing crisis in pan American market with profit margin expected to go down by 7.3 percent as compared to last year. The reason behind these low sales is because of insatiability in oil prices and damping of metals-related business in the North-American market.
Although, if compared with major competitors like MAN which posted only 0.7 percent profit margin, Daimler is current not under any crisis, but again Scania’s decent 10 percent profit margin is somewhat teasing it. About the job cuts, Mr. Stefan Buchner, Regional Chief, Daimler Trucks, Europe and Latin America said, “If we want to remain competitive, we must build more vehicles with fewer people.”