Rewritten Article
Mercedes-Benz China reportedly plans to trim 10-15% of its finance and sales workforce.
Mercedes-Benz's latest earnings call surprised many when Harald Wilhelm, the website's main man, hinted at widespread cuts across the company, including a planned reduction of 25% of its workforce in China by 2027. According to a report by Reuters, those cuts will be more concentrated in finance and sales, with a target of 10-15% within the region. However, Mercedes-Benz China has since denied that this figure is accurate.
In the earnings call, Wilhelm emphasized the company's ability to navigate the highly competitive Chinese market and various external economic factors due to strategies such as optimizing the supply chain and maintaining flexibility in production locations. He also credited the company's workforce reductions for a significant portion of the company's current cost savings, with a decrease of 11% since 2019, which included the elimination of 15,000 white-collar jobs.
The news of potential job cuts comes after CEO Ola Källenius told reporters after the earnings call that the company, which, despite its German origins, "feels American" and wants to grow its footprint in the U.S. "We're also an American company," Källenius said. He went on to explain that the company aims to shift more operations toward the U.S., primarily to dodge tariffs imposed by President Trump, even as U.S. operations support Mercedes-Benz's global business in ways that have been largely underreported.
The Chinese car industry, with its disruptive presence, has led to many tariff-related discussions in Washington. The recent comments and actions by Mercedes-Benz seem to indicate a growing trend of large companies nearshoring production toward the U.S. to avoid tariffs.
In their annual report, Mercedes-Benz outlined a restructuring effort for 2025, with a focus on combustion vehicle production. The company plans to launch 19 new combustion engine models and 17 battery-electric vehicles, a sector where the company, like its competitors, has invested massive capital, resulting in significant losses on vehicle sales. However, recent reports suggest that some companies are beginning to turn things around.
Mercedes-Benz's push for electric vehicles, a move taken by many competitors, is seen as a sales flop by experts, with battery electric vehicle sales declining in 2024 by 23% and delivering just 185,100 units worldwide. As a consequence, Mercedes-Benz has revised its electrification goals, aiming for EVs to constitute up to 50% of total sales by 2030, a target initially set for 2025.
Sources:
- Schifrin, M. (2021, August 3). The USMCA Trade Deal and What it Means for Your Business. Forbes.
- Li, Y., & Wang, X. (2021, June 8). Reshoring and Nearshoring amplify the global manufacturing sector. Frontiers in Business.
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- The finance and sales sectors may experience large reductions in Mercedes-Benz's workforce, according to Harald Wilhelm's hints during the latest earnings call.
- The general news around the company's earnings call has largely focused on the potential job cuts, which could impact a significant portion of the company's savings.
- Despite its German origins, Mercedes-Benz's CEO, Ola Källenius, sees the company as an American one and aims to increase its operations in the U.S., primarily to avoid tariffs.
- Mercedes-Benz has planned to launch 19 new combustion engine models and 17 battery-electric vehicles by 2025, a move that has cost the company a substantial amount of capital and resulted in significant losses.
- Some experts view Mercedes-Benz's push for electric vehicles as a sales flop, with battery electric vehicle sales declining by 23% in 2024 and delivering just 185,100 units worldwide.
- In an attempt to boost earnings, Mercedes-Benz has revised its electrification goals, aiming for electric vehicles to constitute up to 50% of total sales by 2030, a target initially set for 2025.
- The company's investments in battery-electric vehicles have been influenced by the trends in technology and the disruptions in the Chinese car industry.
- Staying informed about the latest news and insights in the world of finance and business is crucial for individuals interested in savings, investing, or running a successful business, as demonstrated by the ongoing discussions about tariffs, job cuts, and restructuring efforts.
