Daimler reaches labour deal on overhauling German sales network

FRANKFURT, July 29 Tue Jul 29, 2014 12:09pm EDT

FRANKFURT, July 29 (Reuters) - Daimler's works' council on Tuesday said it had agreed a deal to overhaul a network of company-owned Mercedes sales outlets in Germany, after management provided dealership employees with job guarantees until 2023.

Daimler has been assessing its network of around 160 "Own Retail" Mercedes dealerships, which account for about half of the brand's car sales in Germany. Daimler now plans to sell around 40 Mercedes-Benz owned sales outlets to third-party dealerships.

Mercedes-Benz is trying to raise its return on sales, which was 7.9 percent in the second quarter, an improvement over last year's 6.6 percent, but still short of a 10 percent goal for the division which includes the Smart brand.

Labour unions had feared that if dealerships in Germany were sold the employment terms for their staff could be changed.

Mercedes employees will have a right to return to Daimler and have their company pension contributions guaranteed for 10 years, a spokeswoman for the works council said.

In April, Daimler employees in Stuttgart staged a rally to protest against the overhaul plans. (Reporting by Edward Taylor; Editing by Greg Mahlich)