Daimler Plans to Cut Production at the Sindelfingen Plant image

Daimler plans to cut production at its Sindelfingen plant as sales of the Mercedes-Benz cars dropped in Europe and China.

Last week Daimler reported a loss on profits at Mercedes and said it will come up with a cost savings plan of about 1 billion euro ($1.3 billion), which will not include job cuts. Now all production lines at the Sindelfingen facility are affected and the management and labor representatives are negotiating shift plans.

As no agreement could be reached concerning the shifts in the fourth quarter, the automaker has called in mediators to come up with a solution. Daimler refused to comment on how the current talks are evolving.

“We are however looking at demand and will adjust our output to keep stocks at the optimum level,” said a Daimler spokesman.

He added that the automaker still plans to add 250 new employees by 2014, although last week Daimler’s CEO Dieter Zetsche said that the company prepares for challenges in China and Europe, comments which scared investors in rivals VW and BMW. Until now China helped the luxury brands avoid the loss felt by the other automakers dependent on the weakened European market.