Daimler names Brecht as company's top workforce representative

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FRANKFURT -- Daimler's supervisory board has chosen Michael Brecht as its deputy chairman replacing Erich Klemm, in a move that may smooth management-labor relations at the automaker.

Klemm, 60, has stepped down after 16 years on the board and will now begin a period of part-time work in preparation for early retirement, Daimler said in a statement.

Klemm was a vocal opponent of cutbacks at Daimler and last year forced managers to reassign cost-cutting specialist Wolfgang Bernhard as a condition of supporting a contract extension for CEO Dieter Zetsche.

Brecht, 48, has been a member of the board since 2012, and has forged a productive relationship with Bernhard who heads the trucks division at Daimler and is tipped as a future successor to Zetsche.

Brecht was appointed as chairman of Daimler's general works council on April 2 and has been a member of the works council at Mercedes’ plant in Gaggenau, Germany, since 1990, and its chairman since 1998.

Michael Brecht, pictured, is seen as a less combative labor representative than his predecessor Erich Klemm.

Daimler’s 20-member supervisory board contains 10 worker representatives capable of blocking appointments and other management decisions.

Cost-cutting moves

Zetsche is in the middle of a cost-cutting drive at Daimler and has frequently clashed with Klemm and the unions in the process. Analysts say more cuts are needed if the company’s Mercedes is to improve profitability that lags rivals Audi and BMW.

In 2013, Mercedes-Benz Cars, which includes the Smart brand, had a return on sales of 6.5 percent in 2013, compared with Audi's 10.1 percent and BMW's 9.4 percent.

Bernhard, 53, has run Daimler's trucks unit since his removal a year ago as head of production at Mercedes. Klemm’s aides said a supervisory board decision to move Bernhard from Mercedes last year was taken unanimously, but sources familiar with the negotiations in February 2013 said Klemm insisted Bernhard be transferred before union officials would agree to extend Zetsche's contract to 2016.

Bernard has spoken this year of the need to cooperate with labor. But Bernhard clashed with Klemm over how to overhaul production at the Sindelfingen plant to cut manufacturing time per vehicle to 30 hours from an average of 60.

In a separate move, Daimler said Ergun Lumali, 51, has replaced Klemm as an ordinary member on the board. Lumali is already deputy chairman of the works council at Daimler and chairman of the works council at Mercedes’ Sindelfingen plant in Germany, where he has been a member since 1994.

You can reach David Jolley at djolley@crain.com.

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