Daimler Moves Some C-Class Production to Alabama

German carmaker Daimler AG said Wednesday it will move some of its Mercedes Benz C-Class car production to its Tuscaloosa, Alabama, plant to take advantage of a growing market, lower production costs and to avoid currency fluctuations.

Daimler, based in Stuttgart, said production of the new generation of the C-Class should start there in 2014. Moving production will maintain its competitiveness, utilize growth opportunities, and let it respond to markets faster and with more flexibility, the company said. It said the move would protect jobs in Germany over the long term.

Further investments will be made at the Tuscaloosa plant, though Daimler didn’t provide details. It said besides the C-Class, the Tuscaloosa plant will continue to produce the R-, M- and GL-Class vehicles, too.

Daimler said the U.S. market is expected to grow, presenting more opportunities and making it “essential to have production facilities of the C-Class close to the market. The sedan version of the series is already the best-selling Mercedes-Benz model in the U.S. market.”

The company also said employment levels at its Sindelfingen plant in southern Germany would be maintained. European production of the C-Class will be moved to the Bremen plant in northern Germany. In return Sindelfingen will get production of the SL, a sports coupe, starting in 2014.

About 1,800 workers in Sindelfingen who will not be absorbed by the production of the SL, will be offered other employment, Daimler said.

Workers had protested the plans over the last several days, fearing about 3,000 jobs could be lost in Sindelfingen.

The C-Class line, which includes a sedan, coupe and wagon, is currently built in Sindelfingen and Bremen, as well as in South Africa and China.

“We are aware of our Sindelfingen employees’ great emotional attachment to the C-Class and we recognize the outstanding work that they perform every day. So this decision was not made easily,” Dieter Zetsche, the company’s chief executive said in the report, adding that “Germany is and will remain at the heart of our production network.”

Daimler recently said it would invest about €3 billion ($4.5 billion) in its German sites to expand and upgrade.

The company said Wednesday Sindelfingen would become more of a central technology and research facility of Mercedes-Benz cars and a center for premium-class and luxury cars which would work increasingly with alternative powertrain systems.

Bremen will become the C-Class production center for European markets and will become the center for that high-volume series. Daimler expects a 20 percent production increase in the C-Class starting in 2014.

Daimler said its Rastatt plant in the southwest of the country would remain its production center for its smaller A-Class and B-Class series cars. The company also builds its Smart compact in Hambach, France.

Shares of Daimler opened about 1 percent higher at €35.46 ($53.01) in Frankfurt trading Wednesday.

12/2/2009 6:38 AM GEORGE FREY, AP Business Writer FRANKFURT