Daimler is converting its engine plant in Berlin into a digital campus and hundreds of jobs may be in danger

02 September 2020, Baden-Wuerttemberg, Sindelfingen: Ola Källenius, Chairman of the Board of Management of Daimler AG speaks during the opening ceremony at the "Factory 56" plant. The new S-Class will be built in the new completely digitalized and networked factory.
Costing around $2.4 million, the conversion project could offer employees long-term prospects.

  • Daimler plans to close its oldest plant in Germany and make it digital, Handelsblatt reported.
  • The $2.4 million conversion is part of a cost-cutting scheme that will cut 20,000 jobs by 2025.
  • The future factory will focus on electromobility and will assemble smaller parts for electric cars.
  • See more stories on Insider’s business page.

Daimler is planning to gradually shut down its engine and transmission production plant in Berlin-Marienfelde and convert it into a digital campus, Handelsblatt reported.

The German factory opened in 1902 and is the oldest Daimler plant producing conventional combustion engines. Its closure will now put 2,500 jobs at risk at the Mercedes Benz parent company.

Costing around $2.4 million, the conversion project could, however, offer employees long-term prospects, as the future factory will focus on electromobility and will also assemble smaller parts for electric cars.

Daimler management and the works council in Berlin agreed to convert the factory into a “digital start-up factory with a series of state-of-the-art pilot lines and test cells,” the company announced Wednesday.

Assembly in the digital plant will be carried out using sensors and software applications, including the latest enhanced reality tools.

There will also be training sessions for representatives from over 30 international Mercedes factories.

Some of the technologies that will be used are already being used at Mercedes. For example, Daimler used the new MO360 ecosystem to produce the S-class.

Daimler is also investing in self-driving cars, teaming up with Alphabet’s Waymo. It is now backing a high-end car service that aims to compete with Uber and Lyft.

FILE PHOTO: A Mercedes-Benz Concept IAA car is displayed prior to the Daimler annual shareholder meeting in Berlin, Germany, April 6, 2016.  REUTERS/Hannibal Hanschke
Daimler plans to transform and put electric cars at the fore.

“We will significantly reduce the workforce,” a manager told Handelsblatt.

According to Daimler, however, its top priority is designing and implementing the project in a socially responsible way.

Jan Otto, chairman of IG Metall in Berlin, told Handelsblatt that the number of jobs to be cut had not yet been decided although the union is demanding that the Daimler plant in Marienfelde remains a production site.

According to Otto, Marienfelde could also be expanded again in the future, perhaps to produce battery systems or at least recycling batteries.

Daimler’s planned transformation from a hardware provider to a software-based company with electric cars at the fore is putting particular pressure on the group’s engine sites which still manufacture classic internal combustion engines.

Daimler CEO Ola Källenius is also pursuing a number of cuts across the board, particularly affecting engine locations.

The main plant in Stuttgart-Untertürkheim is being hit particularly hard by these cost-cutting measures, and thousands of jobs are to be cut at the plant by 2024.

Overall, Daimler plans to cut more than 20,000 of its 300,000 jobs worldwide by 2025.

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