STUTTGART -- DaimlerChrysler and its works council reaffirmed on Monday a pact that preserves German jobs to 2012 and said any job cuts would have to be based on staff volunteering for severance pay.
"Should there be excess personnel, then this problem has to be resolved via agreements on voluntary departures," the works council said in a statement, adding details of severance pay would be discussed in the months ahead.
A company spokesman said Chief Executive Juergen Schrempp and works council chief Erich Klemm had agreed that the jobs pact struck a year ago remained intact.
"Mr. Schrempp and Mr. Klemm confirmed today that the agreements reached in the labor pact 'Securing the Future 2012' from July 2004 remain valid -- everything else will be discussed in the coming months," he added.
The officials were responding to German media reports that DaimlerChrysler was considering ways to reduce payrolls to boost slumping margins.
The pact guaranteed no worker at its German plants would be laid off in exchange for concessions that will generate 500 million euros ($603.4 million) in annual labor savings from 2007.
The accord covered some 160,000 staff on the German payroll as of last July. The group employed nearly 385,000 workers around the world at the end of last year.
The spokesman added that no decisions had been made on personnel measures and that all figures relating to cost savings and job cuts were "pure speculation".
Mercedes Car Group chief Eckhard Cordes had said in mid-February that he wouldn't rule out job cuts at Daimler's premium division, and speculation about possible reductions makes the rounds regularly.
Mercedes posted a rare operating loss in the first quarter and analysts expect restructuring charges at its loss-making minicar brand Smart to keep the division in the red when second-quarter results emerge on Thursday.
Mercedes -- long the group's cash-generating machine -- has been hit by the strong euro, model changeovers, launch costs for new models, spending to fix image-damaging quality problems and stiff losses at Smart.
It aims to improve operating results by 3 billion euros over three years by cutting costs and boosting revenue. Its goal is to raise its operating margin to 7 percent by 2007 from 3.35 percent last year.