Daimler eyes cuts as car industry struggles

FRANKFURT (Reuters) - Daimler (DAIGn.DE) is eyeing further cost cuts, the maker of Mercedes cars confirmed on Saturday as a global economic slump squeezes sales.

Earlier this month, Europe's ailing car makers looked to cut production after dire demand in October sent the market tumbling to its lowest level in years and forced Opel to ask German taxpayers for a billion-dollar bailout.

Labor leaders at Daimler have already said management plans to slash output of its Mercedes-Benz luxury cars, cut the working week and offer redundancy packages after calculating they have 5,800 more staff on payroll than needed.

CEO Dieter Zetsche has not ruled out job cuts.

On Saturday, a German newspaper cited an internal letter sent to Daimler's top management ordering them to save costs everywhere after business sunk "in a way that no-one could have imagined some months ago."

"Everyone has to do their bit," German daily Stuttgarter Zeitung quoted from the letter. In another report, a top Daimler manager said he was examining selling a successor model to the A and B class in America as smaller cars turned fashionable.

Separately, Opel-owner General Motors (GM.N) warned that the industry faced a rocky future.

"We must get ready for hard times not only at Opel but in the car industry as whole," Carl-Peter Forster, president of General Motors Europe said in an interview with newspaper Welt am Sonntag.

"We want to establish a new foundation for GM's business in Europe and do it contractually as we would similarly envisage for any state guarantee," Forster said. "This could involve the employees of Opel getting a stake in the company."