LEINFELDEN-ECHTERDINGEN (dpa-AFX) - Head of the Works Council Michael Brecht has criticized the savings targets of commercial vehicle manufacturer Daimler Truck and described them as unrealistic. "If you set yourself targets, then the targets must be ambitious, but ultimately also achievable," said Brecht at the headquarters of the Dax group in Leinfelden-Echterdingen near Stuttgart.

In view of inflation and many opposing developments, this is very difficult. The company has set itself the goal of reducing its fixed costs, investments and expenditure on research and development by 15 percent by 2025 compared to 2019. "I don't think it's realistic to expect this figure to be achieved," said Brecht.

Extreme pressure

There is extreme pressure to reduce fixed costs, said Brecht. The focus is on administrative and sales costs, for example. In sales, the aim is to eliminate certain processes. The company wants to relocate certain activities that are currently carried out in Germany to countries with lower cost structures, such as Romania. According to Brecht, the works council takes a particularly close look when it comes to relocations rather than changes to processes.

"Of course we need a decent return on sales, of course we need to work on the resilience of the company," said Brecht. However, as a Works Council member, it is not always decisive for him whether the last percentage point of the savings targets is achieved. "For me, the decisive factor is: are we doing the right things now so that we really do have a functioning company on the market?"

The company has developed very well. Most recently, the operating margin in the industrial business - i.e. excluding financial services - was 9.8%. "A few years ago, we would have given anything to achieve something like that," said Brecht.

"We have sufficient financial resources"

"The clear demand is: we want to have our own technologies," said Brecht, looking to the future. "We have sufficient financial resources." There are many areas where the company would need to invest significantly more. For example, in research and development. Whether electrified powertrains or battery technologies: Daimler Truck would have to do significantly more to differentiate itself. When it comes to batteries, for example, there is a high level of dependence on Chinese companies. It cannot be the company's claim to buy in technologies that are important for competitiveness.

Brecht has been calling for the company to produce its own battery cells in Germany for some time. Daimler Truck recently announced its intention to produce battery cells in a joint venture with partners in the USA. According to Brecht, this is primarily due to the so-called Inflation Reduction Act (IRA). The IRA is a US subsidy program worth billions.

Criticism of the debt brake

Without this requirement, a battery cell factory will be difficult to realize in Germany. In countries such as Hungary, it is easier to obtain a claim. In this context, Brecht also criticized the German government's debt brake. Germany has a comparatively low debt ratio. We need to think about whether we can take on a little more debt and build up technologies and infrastructure that can keep up with the rest of the world in the long term.

Looking ahead to the 2024 financial year, Brecht said: "I do believe that the wind will be a little rougher overall." The successful year 2023 cannot simply be carried over to 2024 /rwi/DP/mis