How much of an American-style overhaul they will try to transplant from Detroit to Deutschland is one of the most closely watched issues in German industry these days. But already, analysts say, these executives are shaking up two of Germany's stodgiest industrial empires.  "In their heads, they have no taboos," said Jürgen Pieper, an analyst at Metzler Bank in Frankfurt. "They have this experience, they know what is possible, so they will push harder."  In a country where the political system has been virtually paralyzed since a deadlocked election earlier this month, business executives like Mr. Zetsche and Mr. Bernhard suddenly find themselves on the vanguard of Germany's effort to tackle its high-cost labor market.  Pursuing job cuts of any magnitude is treacherous here -- job-protection laws are strict, the unions still exert great power and unemployment is close to a post-World War II record. The lack of political direction in Berlin, however, is emboldening some companies to act, analysts said.  "If there were a new conservative government, they would be more careful to support it," Mr. Pieper said. "But there is a kind of vacuum, so they don't care what people think. They feel a bit more free."  On Sept. 19, the day after the election, Siemens announced that it would lay off 2,400 workers in Germany. The conglomerate's chief executive, Klaus Kleinfeld, headed its American division until 2004.  Mr. Zetsche, who took over the Mercedes division only this month, moved swiftly to tackle its bloated costs. "We have to learn to do the same with less, or even more with less," he said two weeks ago at the Frankfurt Motor Show.  DaimlerChrysler's board, meeting at the Chrysler headquarters in Auburn Hills, Mich., approved the cuts Wednesday. They will result in a charge of 950 million euros ($1.14 billion) in the fourth quarter.  Still, as Mr. Zetsche and Mr. Bernhard push their reductions, both are constrained by existing labor contracts, as well as a deeply ingrained German reluctance to let even a single worker go.  In July 2004, Mercedes offered a seven-year job guarantee to its 93,000 workers in Germany in return for their giving up a wage increase in 2006. The deal saves 500 million euros ($600 million) a year in labor costs.  In November, Volkswagen guaranteed the jobs of 103,000 workers in Germany until 2011, in return for a 28-month wage freeze. The carmaker claimed the deal cut its labor costs by nearly one-third.  The contracts are subject to renegotiation if business conditions deteriorate -- which arguably, they did, for both carmakers. But neither company has yet taken the step of forced layoffs. DaimlerChrysler said it would achieve the reduction of 8,500 jobs through voluntary buyouts.  The company said the reductions would help keep production in Germany. Last year, during the labor talks, it threatened to move the production of a new Mercedes car to South Africa.  Some analysts were unimpressed with the target, suggesting that DaimlerChrysler could reach it through normal attrition. "Yes, they're bringing down costs, but not aggressively," said Christoph Dolleschal, an analyst at Dresdner Kleinwort Wasserstein in Frankfurt.  Others, however, said it was significant, given that last summer, more than 20,000 Mercedes assembly-line workers walked off the job to protest a proposal to curtail their hourly coffee breaks.  Volkswagen is in an even tougher position than DaimlerChrysler, since its labor contract sets wages 20 percent higher than those at other German carmakers. Its largest shareholder is the state of Lower Saxony, which makes it politically delicate to push for sweeping layoffs.  In early September, Volkswagen warned there were "several thousand" surplus employees at its German factories, particularly in Wolfsburg. But this week, Wolfsburg won a partial reprieve when the company decided to build its compact S.U.V. there rather in Palmela, Portugal.  The tradeoff is that the 1,000 employees who work on the S.U.V., known as the Marrakesch, will be on a new contract, with a 20 percent lower wage, than the standard contract. That is a stipulation Mr. Bernhard is likely to seek with every new vehicle, said Volkswagen officials.  Lest anybody think his pruning was finished, Mr. Bernhard said in an interview with the German newspaper Handelsblatt, "This is just the first step on a long way. We cannot lean back and be complacent."
German auto industry, saddled with some of highest labor costs in world, embarks on stringent belt-tightening campaign, prodded by pair of German ex-colleagues who made their names with even tougher austerity program in United States; DaimlerChrysler says it will cut 8,500 jobs in Germany within next year; cost-cutting to be led by Dieter Zetsche, group chief executive; job losses will fall on struggling Mercedes-Benz unit; at Volkswagen, cost-cuttter is Wolfgang Bernhard; photo (M)