Daimler seeks huge savings

Germany's premium carmaker Daimler was planning savings of about 1.0 billion euros ($1.3 billion) under a program called "Fit for Leadership," the German business newspaper "Financial Times Deutschland" (FTD) reported Friday.

The reduction in costs was needed for the luxury carmaker to be able to stave off the current car crisis in Europe and to better compete in tighter Asian markets, the report said, quoting from sources close to the company's management.

On Thursday, Daimler issued a profit warning, saying 2012 operating profit in its passenger car unit - including top-of-the-range Mercedes, Maybach and AMG brands, as well as compact urban Smart - would fall short of last year's operating profit of 5.19 billion euros.

As a result, Daimler Chief Executive Dieter Zetsche said the company was preparing a cost-cutting plan, details of which were scheduled to be unveiled in October.

According to a spokeswoman for Daimler's works council, Zetsche already announced "tougher times" for the carmaker in a letter to employees this summer. However, potential job cuts were not mentioned in the letter.

"There haven't been any talks with us about job losses so far," news agency dpa quoted the unidentified spokeswomen as saying.

Another unidentified source allegedly close to the talks told Reuters news agency that the program would primarily aim to "strengthen productivity" by avoiding doubling up on work, as well as include measures to cut procurement, marketing and administration costs.

The ultimate goal of the program was to boost company sales, Reuters quoted the source as saying, adding that Daimler management envisaged savings of "significantly more" than the one billion euros being mentioned in current media reports.

uhe/dr (dpa, Reuters)