In a news conference today, Mecedes has announced they will be cutting 8,500 jobs from its German workforce.  This number is up from the original prediction of 5,000 jobs we reported earlier.

The job cuts, which represent 8% of Mercedes' workforce, will come via voluntary termination agreements, and will cost the company an estimated $1.1 billion. Despite the charges, the Mercedes Car Group believes the expenses will be compensated by extraordinary income and improvement in the ongoing operating business, and Daimler Chrysler has maintained its profit forecast for 2005 fiscal year.

You can check out the full press release below.


OFFICIAL PRESS RELEASE


Headcount Reductions At Mercedes Car Group In Germany


Stuttgart, Sep 28, 2005

Today, the Board of Management of DaimlerChrysler AG has set a reduction target of 8,500 jobs for the Mercedes Car Group Business Division. The Supervisory Board has authorized the Board of Management for the provision of the required funds.

The headcount reductions are to be achieved in the course of the next twelve months by means of voluntary termination agreements. These headcount reductions are indispensable. They will contribute to significant improvements in the competitiveness of Mercedes-Benz through an increase in productivity. This and the attractive Mercedes-Benz product range are two major requirements for the long-term success of Mercedes Car Group. The measures will also contribute to the sustained safeguarding of production at the location Germany.

DaimlerChrysler continues to stand by the “Future Safeguarding 2012“ agreement signed in 2004 without reservations; in the case of headcount restructuring measures, the agreement provides for voluntary terminations as a first step. All arrangements of the agreement negotiated with the employee representatives are being implemented on a consistent basis.

The decision of the Board of Management and the Supervisory Board will lead to charges of €950 million. The major portion of the charges will be posted in the fourth quarter of 2005. The charges are to be compensated by extraordinary income as well as from improvements in the ongoing operative business. Therefore, the profit outlook for the Group for the year 2005 remains unchanged: DaimlerChrysler continues to expect a slight increase in operating profit compared with the prior year (€5.8 billion), excluding charges related to the realignment of the smart business model.

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This document contains forward-looking statements that reflect management's current views with respect to future events. The words „anticipate,“ „assume,“ „believe,“ „estimate,“ „expect,“ „intend,“ „may,“ „plan,“ „project“ and „should“ and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: an economic downturn in Europe or North America; changes in currency exchange rates, interest rates and in raw material prices; introduction of competing products; increased sales incentives; the successful implementation of the new business model for smart; supply interruptions of production materials, resulting from shortages, labor strikes or supplier insolvencies; and decline in resale prices of used vehicles. If any of these or other risks and uncertainties occur (some of which are described under the heading "Risk Report" in DaimlerChrysler's most recent Annual Report and under the heading "Risk Factors" in DaimlerChrysler’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission), or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.

Copyright © 2005, Daimler Chrysler AG