Daimler May Seek €1 Billion in Cost Cuts

Daimler AG, which said last week its Mercedes-Benz Cars unit has launched a new cost reduction initiative, aims to save at least €1 billion ($1.3 billion) over an unspecified period, according to news reports.

The accounts cite unidentified sources who say the company doesn't plan to eliminate jobs. Reuters reports that Daimler aims to boost productivity and trim administrative, marketing and purchasing expenses. The cost reductions are prompted by the deteriorating European market and easing Asian growth.

Daimler announced the "Fit for Leadership" program without disclosing details when it lowered its 2012 outlook for the car unit. The company now predicts operating profit will decline this year from €5.2 billion ($6.8 billion) in 2011. Daimler forecast in July that income this year would equal last year's level.