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Nov. 14, 2019, 4:53 a.m. EST

Daimler to cut jobs in bid to save $1.1 billion

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By Max Bernhard

Daimler AG (DAI.XE) said Thursday that it plans to cut jobs and save more than one billion euros ($1.10 billion) in personnel costs by the end of 2022 to mitigate the high expenses of lowering the emissions of its cars.

Chief Executive Ola Kallenius said efforts to cut vehicle emissions would hit the car maker's earnings in 2020 and 2021. "To remain successful in the future, we must therefore act now and significantly increase our financial strength," he said.

The German company said it plans to save more than EUR1 billion in personnel costs at its core Mercedes Benz Cars & Vans divisions. It will also cap investments in property, plant and equipment and in research and development at the 2019 level. It is targeting a reduction of those expenses in the medium term at the businesses, it said.

Mercedes-Benz Cars & Vans now expects an operating return on sales of at least 4% in 2020 and at least 6% in 2022, excluding possible import tariffs.

Daimler's Mercedes-Benz trucks business in Europe has started to cut variable costs by EUR250 million and eyes lowering personnel costs by EUR300 million by the end of 2022.

Daimler said it plans to increase its free cash flow, targeting net liquidity of more than EUR10 billion.

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