Daimler to convert engine production to electric at its largest factory, fewer workers required causing labor issues

Daimler has ambitious plans for electric vehicle production. It is among the few major automakers that not only have accepted the transition to fully electric propulsion in the auto industry, but who have also committed to converting production assets currently dedicated to internal combustion engine production. That’s a difficult move for large legacy automakers.

In one of its biggest move toward that goal, the company announced today plans for its major Untertürkheim plant to produce electric motors in a deal with workers.

Daimler employs over 19,000 people at the Untertürkheim factory, one of the biggest powertrain manufacturing facility in the world. There are a lot of complex internal combustion engines (ICE) coming out of that place, which produces everything from complete engines, axles, transmissions and other components.

Due to the transition to electric propulsion, which requires simpler electric motors, the company expects the modernisation of the plant will require significantly fewer employees.

The German automaker has been trying to negotiate with its ‘Works Council’, which represents the factory workers, a plan to transition the factory. As it currently exist, the maker of Mercedes-Benz expects the plant to become irrelevant in the next few decades as electric vehicles overtake gas-powered cars.

In the new deal announced today, Daimler agreed to build a new “e-technology centre” within the plant where prototypes for electric powertrains will be constructed. They will use the space for the assembly of “electrified powertrain modules and start producing components for electric vehicles.”

Frank Deiß, Site Manager Mercedes-Benz Untertürkheim Plant and Head of Production Powertrain Mercedes-Benz Cars, said about the announcement:

“The Mercedes-Benz Untertürkheim plant actively tackles the challenge of electric mobility from a position of strength. We need our employees to produce combustion engines and transmissions in growing numbers and top quality. At the same time we prepare for the electrification of the powertrain,”

Daimler added that the equipment for fuel system components and turbine housings will be relocated to make space for the new “e-technology centre” and that employees affected will be offered equivalent jobs.

It’s a first significant move for Daimler to start converting its ICE production assets to EV production assets. It comes as the company started transitioning its Smart brand to electric and Mercedes prepares to launch its ‘Mercedes EQ’ brand with its first electric vehicle, an SUV, by the end of the decade.

Featured Image: Aerial view oft the Mercedes-Benz plant Untertürkheim