Daimler dust-up
November 30, 2009
About 10,000 Daimler workers gathered outside the carmaker's Sindelfingen plant on Monday to ask management not to transfer production of its C-Class Mercedes cars to Tuscaloosa, Alabama in 2014.
Daimler managers say the company is considering the move to take advantage of lower production costs and to avoid currency fluctuations.
But Erich Klemm, the works council's chief representative, said Monday the model line was of central importance to Daimler's biggest car production facility, near Stuttgart.
The works council said relocating would put about 3,000 jobs in Sindelfingen at risk.
Split opinions
The prospect that Daimler may move C-Class production to the United States has divided analysts.
Ferdinand Dudenhoeffer, the director of the Center for Automotive Research at the University of Duisburg-Essen, told reporters Daimler would not be able to avoid relocating C-Class production in the future.
"The US dollar will remain weak for a number of years," he said, explaining that under the current exchange rate one hour of American labor costs about $45 or 30 euros, as compared to 54 euros at Sindelfingen.
After factoring in lower energy and input costs, Dudenhoeffer said US-based production could save Daimler some 400 million euros annually.
But Helmut Becker, an auto industry expert from the Munich-based IWK economics institute, said shifting production of C-Class could damage the brand's image.
Becker said the "Made in Germany" tag was a major factor driving the vehicle's success in the United States and other key markets.
"That's not something you can simply transfer (to another plant)," he told AP news agency, adding that he thought the public discussion about factory locations was intended to pressure the company's workforce into accepting cost-cutting measures.
Popular pedigree
The C-Class line, which includes a sedan, coupe and wagon, is currently manufactured in Sindelfingen and Bremen, as well as in South Africa and China.
The car's history can be traced back to 1982, when the company released the Mercedes 190 compact executive model that was quickly given the nickname "Baby Benz".
The vehicle line proved popular among high-end buyers and in 1993 the model's name was changed to C-Class.
It is currently Daimler's most popular model. Last year 439,700 of the 1.27 million cars Daimler sold worldwide were C-Class vehicles. About 30 percent of them were sold in the United States.
sje/AP/dpa
Editor: Michael Lawton