Daimler's Sindelfingen plant is the group's largest
Daimler is to spend EUR1.5bn (US$2bn) to modernise the Mercedes-Benz Sindelfingen plant by 2020 and has also reached a multi-year agreement with the works council on cost reductions worth several million euros.
The company said it would also produce another model in Sindelfingen. Management board chairman Dieter Zetsche said: "We are growing dynamically abroad while continuing to make enormous investments at our sites in Germany. The agreement combines investments for the future with the necessary savings.
"This approach is the basis for our success and the foundation of our growth strategy 'Mercedes-Benz 2020'."
Works council chairman Ergun Lümali added: "It was important to us to protect jobs and maintain the existing wage tariff agreements. I'm proud that the works council was also able to secure a new model for Sindelfingen in addition to the investments."
Plant chief Willi Reiss said the spend would be on the construction of a new body shop, a new paint shop and a new assembly hall for the next E-Class and its successors.
A new logistics centre will also be established where suppliers and service providers will be responsible for incoming and outgoing goods.
Some 100 workers who have been on temporary contracts since the spring will be taken on permanently while the number of apprentices will be increased by 150 over five years beginning in 2016.
Markus Schäfer, head of production and supply chain management at Mercedes-Benz Cars said: "Through the overall package agreed with the works council, we will make Sindelfingen fit for global competition. Our growth strategy and investments in the future will protect our employees' jobs and income. The plants in Germany form the backbone of our global production network."
Daimler said it will renew the range of models produced in Sindelfingen adding a new vehicle. By 2020, Mercedes-Benz plans to launch 12 all-new models.
The Sindelfingen plant celebrates its 100th anniversary next year. With more than 22,000 employees, it is the Daimler Group’s biggest production plant worldwide currently producing the S-Class sedan coupe, sedan and wagon versions of the E-Class, the CLS and the CLS Shooting Brake. Production of the new Mercedes-AMG GT sports car will start soon.