Mercedes moves

The German car industry took another hit from the United States on Wednesday when top car company Daimler said it would be moving part of C-Class Mercedes production to a plant in Tuscaloosa, Alabama, in 2014.

The move would directly affect employees in Sindelfingen in the southern German state of Baden-Wuerttemberg, where thousands of workers had staged protests on Tuesday. According to media reports, 60 percent of production is set to move to Bremen in northern Germany, 20 percent to Tuscaloosa, and a further 20 percent to plants in China and South Africa.

But Daimler was quick to promise that none of the jobs in the Sindelfingen plant would be lost, saying that workers would be offered other opportunities. The move is expected to create between 1,000 and 1,200 jobs in Alabama.

"Germany is and remains the heart of our production network," said Daimler chief executive Dieter Zetsche said in a statement. The move to Tuscaloosa "is essential for strategic and operational reasons, so that Mercedes-Benz remains competitive and can fully utilize future growth opportunities," he added.

According to Daimler production head Rainer Schmueckle, logistics and customs savings mean that the move would save the company 2,000 euros ($3,000) per car. Global automakers have increasingly tried to produce cars in or near major markets to limit foreign exchange effects and take advantage of lower costs.

Daimler's chief human resources manager said that 20,000 people were currently employed at the Sindelfingen factory, with less than 4,000 producing the C-Class Mercedes.

bk/AFP/Reuters/AP
Editor: Chuck Penfold