The retirement from Daimler's supervisory board of a combative trade union veteran may smooth management-labour relations as the German carmaker tries to cut costs and close a wide profitability gap with its rivals.
Erich Klemm steps down as deputy chairman when he turns 60 next month after 16 years on the board. He has long resisted cutbacks and last year forced managers to reassign cost-cutting specialist Wolfgang Bernhard as a condition for extending the contract of Daimler chief executive Dieter Zetsche.
Klemm's replacement on the 20-member supervisory board, whose 10 worker representatives can block appointments and other management decisions, is Michael Brecht, 48. He has already forged a productive relationship in the trucks division with Bernhard, who seen as a possible future Daimler CEO.
Zetsche has spent much of a decade slimming Daimler down after a period of global expansion, frequently clashing with Klemm and the unions in the process. But analysts say more cuts are needed if its Mercedes-Benz car division is to improve on a return on sales that is only two thirds of rivals Audi and BMW. "Leadership may become a bit smoother with the retirement of that union guy," said David Herro at Harris Associates L.P, Daimler's fourth largest shareholder with a 1.36-percent stake.
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