Daimler AG’s DDAIF has announced its plans to sell the Hambach factory in eastern France, where the company has been manufacturing the Smart compact car for years and currently employs around 1,600 people. The move is in line with the firm's cost-containment efforts in wake of the COVID-19 pandemic.
Daimler aims to improve productivity in light of heavy investments in electrification and other fields. Notably, the company plans to manufacture the next generation of Smart electric cars in China.
Meanwhile, Daimler recently announced that it is implementing a number of actions to boost the company’s cash position in the face of the rising uncertainties due to the coronavirus crisis. The company, which issued its restructuring plan last November, has enforced a variety of measures, including substantial staffing-level adjustments with Daimler executives facing bigger reductions than rank-and-file workers, in a bid to minimize costs during this period of reduced business. The firm plans to slash its workforce by more than 10,000 to reduce personnel spending by 1.4 billion euros ($1.6 billion) by 2022. Another 10,000 jobs could be axed through 2025.
Furthermore, Daimler’s Mercedes-Benz brand recently arrived at a mutual agreement to temporarily put on hold its partnership with BMW AG BAMXF to jointly develop the next-generation automated driving technology. The partnership, announced last July, was aimed at developing driver assistance systems, fully-automated driving on highways, and automated parking, with the first cars fitted with the technology scheduled for a 2024 launch. Nevertheless, the companies announced an indefinite suspension of the alliance, citing elevated costs and unfavourable economic circumstances. The two firms also stressed that this cooperation might be resumed at a later date.
Nevertheless, Mercedes and BMW will continue working together in other areas, including their 2015 alliance with Audi on the consortium of ‘Here’ — a mapping and location data company. In addition, Daimler and BMW will jointly work on the merger of short-term rental services Car2Go and DriveNow, in a bid to expand their footprint in the developing mobility market.
Zacks Rank and Stocks to Consider
Daimler currently carries a Zacks Rank #3 (Hold). Shares of the company have depreciated 22.2%, year to date, as against the industry’s decline of 12.3%.
Some better-ranked stocks are China Automotive Systems, Inc. CAAS and LCI Industries LCII, both carrying a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Shares of Niu have gained 1%, year to date, as against the industry’s decline of 11.7%.
Shares of LCI Industries have rallied 6%, year to date, as against the industry’s decline of 11.7%.
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