Due to the restrictive labour legislation in France, Daimler will have to exhaust all features before finalizing its Hambach plant, where it has been building the Smart ForTwo since 1997.
FRANKFURT – Daimler will have to locate a customer willing to save his French factory that manufactures smart cars, because local legislation makes it virtually impossible to close.
This puts the car manufacturer in the awkward position of being a suffering seller, unable to unload optimal concessions from buyers such as the British commercial organization Ineos, which is in talks with Daimler to take over the plant and build a rival for Land Rover Defender.
“In France, it is necessary to locate a use for the plant after [its closure],” Executive Chairman Ola Kallenius told reporters about the effect call on July 23. “The last hotel would be a close, but that’s not our goal.”
Due to the country’s restrictive hard-working laws, Daimler will have to exhaust all features before finishing the site, where he has built the Smart ForTwo since 1997. More than 800 employees are hired at the plant and another 800 are hired locally through suppliers. Kallenius said his goal was to save “as much as possible.”
Ineos has two other alternative features when looking for a location to build its Grenadier SUV: its initial plan to open a factory in Bridgend, Wales, near a planned Ford engine plant, or at Nissan’s plant in Barcelona, Spain.
This would possibly partly explain why Daimler had a bad opinion on the price of hambach assets. At the time of the quarter, it recorded plant deterioration of approximately 500 million euros, roughly equivalent to the investment it made to review the site’s infrastructure and the structure of a new framework workshop.
Spoiled by years of growth, high-end automakers, which added Mercedes-Benz, have complained of limited capacity despite the stable expansion of their production footprint.
Even when Daimler first announced plans to reduce the prices of the entire group by 1.4 billion euros in November, only jobs that did not belong to the assembly line were affected.
Kallenius’ pre-month resolution of exploring a Hambach sale is the first sign that the coronavirus pandemic may also end years of global expansion in luxury car sales.
“When we design the fall transformation plan we’re implementing lately, we don’t opt for a pandemic recession. That’s why we’re reviewing all our prices, adding constant prices similar to production capacity and labor,” Kallenius said.
The plant was intended to build compact electric cars such as the Mercedes-Benz EQB crossover after Daimler to build long-term smart cars in China after 2022 in a joint venture with Zhejiang Geely Holding Group.
Daimler said in 2008 that he planned to invest in Hambach to start generating a compact electric car for Mercedes. The paints are largely finished, confirmed by the car manufacturer. Includes a new frame workshop, a new painting workshop and a modernization.
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