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Mercedes Announces 14,000 More Job Cuts

August 24, 1993

STUTTGART, Germany (AP) _ Mercedes-Benz will eliminate another 14,000 jobs next year with the goal of saving $600 million, the company announced Tuesday.

Mercedes, whose earnings fell 45 percent last year, cut back its work force by 15,000 jobs last year and already had announced 7,000 layoffs this year, reducing its staff to about 88,000.

The new cuts would trim that figure by nearly 16 percent.

Car sales in Europe have plummeted this year and all the automakers are suffering. In May, registrations of new Mercedes cars fell by 6,899 vehicles to 15,966 - a drop of 30 percent from a year earlier.

Mercedes, the motor division of Germany’s Daimler-Benz AG, said it was holding talks with labor representatives at its factories about how and where to make the cuts.

Most of the reductions should be through attrition and early retirement, but layoffs for other employees, including management, can’t be ruled out, Mercedes chairman Helmut Werner said.

The company said it would attempt to cut back on benefits, focusing on saving pension and health plans while reducing bonuses or linking them more closely to the company’s success.

Mercedes came under heavy criticism last year with the launch of its opulent S-class sedans, cars so large that they were dubbed ″cathedrals on wheels.″

Werner, the company’s new chairman, has sought to diversify the kinds of cars built by Mercedes.

Both Mercedes and BMW plan to unveil hatchback prototypes at the Frankfurt International Automobile Show Sept. 7. The new models are aimed at the top end of the small-car market, but production won’t start until 1996.

Unification has driven Germany’s already high fuel taxes higher, making drivers more sensitive to gasoline efficiency.

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