Job cuts provoke clash on DaimlerChrysler board

Shareholder and union representatives clashed at Friday’s meeting of carmaker DaimlerChrysler’s supervisory board in the second such division in the last month in Germany’s normally consensual boardrooms.

Daimler’s three-year operational plan, which includes previously announced plans to cut 8,500 workers at its luxury Mercedes arm, was approved against the opposition of the eight German worker representatives on the board.

Nate Gooden, a US union official representing workers at Chrysler, voted with the 10 shareholders’ representatives which, taken with the double vote of the chairman, led to a 12-8 result, people close to the board said.

The result suggests that plans by Dieter Zetsche, the head of Mercedes and Daimler’s chief executive-designate, to trim costs and the workforce could prove harder than expected to implement. Under an agreement reached last year there can be no forced lay-offs at Mercedes until at least 2012 so job cuts have to rely on voluntary departures.

The vote came after a similar split in the board of Volkswagen ended in a different result after the chairman and two shareholder representatives backed unions in pushing through their candidate for a sensitive labour post.

The clashes have brought renewed attention to Germany’s supervisory board system, under which workers receive half of about 20 seats and only the double vote of the chairman prevents them from imposing their views.

This representation, part of the wider system known as co-determination in which workers have a large say in the running of companies, has led to a large degree of consensual decision-making and stable labour relations.

But criticism has been voiced as Germany has been forced to face up in recent years to its high cost base under pressure from eastern Europe and Asia.

Hakan Samuelsson, chief executive of conglomerate MAN, said last week before Daimler’s board meeting: “One of the biggest problems in Germany is we always want consensus. There are too many 20-0 decisions. We need to have the courage to have more 11-9 ones.’’

Daimler’s works council, which co-ordinates the views of the worker board members, said it had voted against the plan because it was opposed to the high level of job cuts.

A spokeswoman said speculation that there could be 7,500 more job cuts was contained in a consultant’s report and was not adopted by the supervisory board. No further figures were discussed in the meeting.

But Mr Zetsche has warned that there were too many workers at Daimler’s Stuttgart headquarters, while weekend media reports suggested the three-year plan included thousands more job cuts.