WORKERS AT Daimler’s biggest car factory in Germany have struck a deal with managers that secures their jobs for 10 years, a guarantee that brought an end to a dispute over moving production to the US.

All 37,000 employees at the Sindelfingen plant, which makes Mercedes-Benz limousines, will not face any forced redundancies until the end of 2019, Daimler said yesterday.

The deal is unusual even in a country where similar agreements for shorter periods were common before the financial crisis. It shows the lengths executives were prepared to go to secure the support of the powerful IG Metall union for moving production of the Mercedes C-Class saloon from the 94-year-old factory to Tuscaloosa in the US. Daimler is to create 2,700 new jobs to compensate for the move.

The new jobs will stem from shifting production of the SL roadster model from Bremen to Sindelfingen and a pledge to continue producing the new generations of luxury E-Class and S-Class saloons at the plant.

The union is prepared to moderate its wage demands across German industry in an effort to save jobs. There is an escape clause for Daimler if the economy deteriorates rapidly.

Daimler’s move followed protests by thousands of workers during the past week over management’s decision to move the production of its best-selling C-Class sedan away from Sindelfingen.

The Sindelfingen plant is close to Daimler’s headquarters and is the heart of the carmaker’s research and development and research operations.

The carmaker will begin assembling up to one-fifth of the C-Class models in the US from 2014, hoping to benefit from cheaper labour costs and the weak dollar.

Dieter Zetsche, Daimler’s chief executive, said that the move would “open up additional chances for growth” and “make an essential contribution to our competitiveness”.

IG Metall said: “Ten years is an exceptional time span, even more so in the face of the crisis.”

The jobs guarantee comes in spite of the worst slump in demand in the global car industry for decades. Daimler’s sales fell 12 per cent in the first 11 months of 2009. A handful of German groups have made similar pledges in the crisis – mostly to secure cost cuts or hold on to highly skilled workers.

Schaeffler Daimler expanded an existing guarantee until 2011 for all German workers after its works council agreed on more than €4 billion in cost cuts this year. – (Copyright The Financial Times Limited 2009)