Mercedes C Cars to be Built in U.S.

Move will reduce both labor costs and exposure to foreign exchange pressures

Daimler said on Dec. 2 that it will manufacture its popular C-Class autos at a plant in Tuscaloosa, Ala., moving closer to a major market and reducing its exposure to foreign exchange pressures.

The move would allow Daimler to save 2,000 euros (US$3,000 ) per vehicle thanks to "lower salary levels" in the U.S., where the C-Class is Mercedes-Benz' most popular model, operating director Rainer Schmueckle said.

Around 1,000 jobs would be created at the plant, the company said.

Workers in Alabama now manufacture M-, R- and CL-Class sports utility vehicles, and that plant produced 152,561 vehicles in 2008. Mercedes-Benz sold around 251,000 cars in the U.S. last year, compared with global sales of about 1.13 million vehicles.

Building the car in Tuscaloosa was "essential for strategic and operational reasons, so that Mercedes-Benz remains competitive and can fully utilize future growth opportunities," chief executive Dieter Zetsche said.

But the move, against which Daimler workers protested on Dec. 1, does not signal a major shift in Daimler's strategy, Zetsche said. "Germany is and remains the heart of our production network," he stressed. Daimler's works committee nonetheless charged it was "a bad decision with fatal consequences" for the group's core plant in Sindelfingen, southwestern Germany, and said workers would stage another protest there on December 9.

The company said it would shift work on its SL sport models to Sindelfingen and focus on making C-Class cars for the European market in the northern port of Bremen. Daimler does not plan to eliminate jobs at the two German plants, it said, but Sindelfingen workers had hoped to take part in making the new C-Class cars.

Overall, Daimler plans to produce 60% of its C-Class cars in Bremen, 20% in Tuscaloosa, 10% in China and 10% in South Africa.

The shift in production of the SL roadster to Sindelfingen is expected to result in a rise in production volumes of about 20% from 2014, the company said. Meanwhile, some 1,800 Sindelfingen workers "will be offered attractive employment opportunities" elsewhere, the group said without providing details. The plant currently employs more than 28,000 workers.

Copyright Agence France-Presse, 2009

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