FRANKFURT (Reuters) -- DaimlerChrysler's premium Mercedes Car Group division will have to take a close look at personnel costs as it seeks savings to boost profits, a magazine quoted division chief Eckhard Cordes as saying.
In an advance release on Tuesday, Germany's Auto, Motor und Sport quoted a participant at a meeting for senior executives late last month as saying Cordes had told them personnel costs were under review because cost-cutting had not gone far enough.
It said outside contractors were also a potential target.
"The comments from mid-February still apply," a company spokesman said when asked about the report. At that time, Cordes told reporters that he could not rule out job cuts as one way to improve the division's performance.
The strong euro, model changeovers and hefty losses at its Smart minicar brand plunged Mercedes to a rare operating loss of 954 million euros ($1.14 billion) in the first quarter.
The profit collapse prompted an efficiency drive that aims to boost earnings at the division by over 3 billion euros and more than double its operating margin to 7 percent by 2007.
DaimlerChrysler has pledged, however, to forego forced layoffs in Germany until at least 2012 in return for concessions that will cut its labor bill by an annual 500 million euros from 2007.
The accord covers some 160,000 staff on the German payroll as of a year ago. The group employed nearly 387,000 workers around the world at the end of March, of which just over 107,000 worked at Mercedes.