Mercedes-Benz to restart German severance programme

Mercedes-Benz will restart a voluntary redundancy programme in Germany in December as it seeks further cost cuts, chief executive Ola Kaellenius said Wednesday.

Kaellenius told reporters and investors on an earnings call that Germany accounts for about 15 percent of Mercedes-Benz sales but two-thirds of its employees and structures. He said the company was in discussions with unions and did not give a target number of job cuts.

Mercedes-Benz warned on full-year profits on Tuesday, citing difficulties in China. German carmakers have faced strong competition and falling demand in China, the world's largest car market.

The company said third-quarter net profit rose almost 30 percent to 1.52 billion euros, or $1.69 billion, while overall sales fell 4.5 percent to 30.7 billion euros, largely because of a decline in China.

Kaellenius said Mercedes-Benz could not afford to abandon China despite an intense price war. He also said labour costs in China, Hungary, Romania and the United States were lower than in Germany.