Daimler Truck recovers progress with a cost-cutting strategy
Daimler Truck Unveils Ambitious Savings Program at Virtual AGM
Shareholders of Daimler Truck, headquartered in Leinfelden-Echterdingen, Germany, were invited to a virtual annual general meeting (AGM) this week. CEO Karin Radström, who took over the role last year, expressed her desire to transform the truck and bus manufacturer into a global leader.
The key discussion at the AGM involved the approval of Daimler Truck's significant savings program, titled "Cost Down Europe," designed to lower costs by over €1 billion by 2030. The initiative aims to enhance competitiveness, particularly in the European market.
In her address to shareholders, Radström, a native Swede, admitted that her speech was longer in German than she was accustomed to, having been the company's CEO for less than a year. She pointed out the company's resilient financial standing with its vehicles while announcing the forthcoming implementation of the approved cost reduction program.
The program's implementation will result in reductions in Germany, with shareholders expressing concerns about the potential impact of current political developments on the company's business. Positive feedback was given for the manufacturer's openness to technology, particularly in the development of electric and hydrogen-powered vehicles. Shareholders are expected to receive a dividend of 1.90 euros per share for 2024.
Daimler Truck's revenue forecast for 2025 has been revised due to weak demand and economic uncertainty in North America, leading to a sales decline of 18% in Europe. Despite these challenges, the company aims to maintain stable operating results in 2025 compared to 2024, while improving adjusted return on sales to between 8% and 10%.
In an effort to reach its cost-saving goals, the company plans to cut around 28,000 jobs globally, with many of the reductions affecting German sites such as the Wörth truck assembly plant and other production locations. The company emphasizes its commitment to implementing these reductions in a socially responsible manner, working closely with the works council and the IG Metall union.
The loss of these jobs poses a significant challenge for the German automotive industry, which is grappling with a wider crisis characterized by mounting layoffs and restructuring efforts. However, Daimler Truck remains optimistic, with CEO Radström and Chairman Joe Kaeser setting ambitious profit targets. They aim to achieve profitability levels above 10%, comparable to Europe's most profitable truck manufacturers, as part of their long-term strategy to become the world's largest truck supplier.
The manufacturing industry at Daimler Truck is aiming to increase competitiveness through the implementation of the "Cost Down Europe" program, a significant savings plan designed to reduce costs by over €1 billion by 2030, primarily within the European market. The finance and business sectors will be impacted as the company plans to cut around 28,000 jobs globally, with many of the reductions affecting German sites.
