Mercedes-Benz Halts Investments in German Sites and Weighs Plant Closures

Mercedes-Benz Production Board Member Michael Schiebe stated in an interview published on the company's intranet that the group has decided to "stop all further investments in the German locations" because negotiations with the works council and the IG Metall union over cost reductions have failed to yield progress. This move aims to pressure the employee side into agreeing to lower labor costs.

Schiebe noted that no "solution corridor" is currently visible and that investing in Germany is not feasible under the existing cost structures. He revealed that hourly production costs in Germany are up to five times higher than in Eastern European locations. If no agreement is reached, new models will be produced exclusively abroad.

Additionally, Human Resources Board Member Britta Seeger confirmed that management is examining "concretely and in detail" which German plants the group can still afford to maintain. While the company aims to avoid closures at all costs, it must now pursue this option more seriously. Previously, Schiebe had mentioned the possibility of closing two German plants, involving one assembly plant and one powertrain plant, if costs were not reduced.

The core of the conflict lies in Mercedes-Benz's "productivity offensive." Facing a significant drop in passenger car profits, management is demanding longer working hours without pay increases, proposing a shift from a 35-hour to a 40-hour work week. However, the 35-hour week is viewed as a historic achievement by the German metal industry union, which considers it a red line. Simultaneously, the union is seeking a 5% wage increase in the upcoming collective bargaining round, which management argues would further exacerbate Germany's high labor cost disadvantage.