Daimler Plan to Outsource Accounting Sparks Opposition

DaimlerChrysler may outsource some of its accounting work to countries that pay lower wages, German media sources reported.

According to the company’s works council, the German-U.S. car manufacturer is considering the Czech Republic and India for some of the company's accounting work. The works council opposes the outsourcing plan and has threatened a veto.

"We are saying without a balance of interest this simply won't fly," said Erich Klemm, head of the council, according to a report in Monday’s Stuttgarter Zeitung. He called the plan “the biggest restructuring program that there has ever been in the auto sector.”

DaimlerChrysler Chief Executive Dieter Zetsche, who hopes to save around $1.8 billion per year, wants to cut a fifth of the company's accounting, personnel and strategic planning staff worldwide, Forbes reported. In total, Daimler’s restructuring plan calls for cutting about 6,000 positions, including 3,200 in Germany, Accountancy Age reported.

The automaker wants to begin implementing the restructuring in August, with 60 percent of the changes to be made by the end of the year.

Meanwhile, Zetsche believes the automaker’s operating profit will be more than 6 billion euros for 2006, even though sales have lagged at the U.S. Chrysler division. Zetsche, speaking to international media at a roundtable meeting in Tokyo last week, said that high fuel prices were one factor leading consumers away from U.S. makers. He added that Japanese cars were no more fuel-efficient than Chrysler's vehicles in most cases, however. "Perceptions are facts as far as purchasing considerations are concerned," he said, according to Rueters.

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