The German automotive group Mercedes-Benz has announced that it is suspending all further investment in its production sites in Germany and has begun to examine in detail the possibility of closing certain plants. This is due to high production costs and the breakdown of negotiations with trade unions regarding cost-cutting measures. The decision was taken against a backdrop of a deepening crisis in the German car industry, intensifying competition from China and large-scale job cuts.
- Mercedes-Benz has temporarily halted further investment in its German plants.
- Management is considering closing two plants due to high production costs.
- The company is calling for a reduction in labour costs.
- At the same time, Schaeffler is cutting 3,460 jobs in Europe.
Mercedes-Benz has cast doubt on the future of its German factories
Mercedes-Benz management has decided to put further investment in Germany on hold following several months of fruitless negotiations with the works councils and the IG Metall trade union.
Member of the Board responsible for production, Michael Schiebe explained that the current cost structure does not allow the company to continue investing in the country’s production capacity.
According to him, the cost per hour of labour at German companies is, in some cases, five times higher than the equivalent costs at factories in Eastern Europe.
Back in September, Shibe warned that without cutting costs Mercedes-Benz It may close two plants — one car assembly plant and one powertrain manufacturing plant.
Head of Human Resources Britt Seeger She confirmed that the company has begun to assess in detail which German plants it is able to retain in the future. No final decision has yet been made regarding the closure of the plants.
The company wants to extend the working week without increasing salaries
One of the main points of contention between Mercedes-Benz management and the trade unions has been a proposal to increase the working week from 35 to 40 hours without additional pay. Cuts to bonuses, holiday pay and Christmas bonuses are also under discussion.
The IG Metall trade union is opposed to a deterioration in working conditions. In the absence of an agreement, the group’s management has not ruled out moving the production of new models outside Germany.
The crisis in the German car industry is leading to thousands of redundancies
Mercedes-Benz’s problems reflect a wider crisis in the European the automotive industry. Manufacturers are facing weak demand for cars with internal combustion engines, high costs and competition from Chinese companies in the electric vehicle market.
On 3 November, the German automotive components supplier Schaeffler announced that it would be cutting 3,460 jobs in Europe, including approximately 2,660 in Germany.
The company also plans to close four German sites in Dortmund, Morbach, Berlin and Schwalbach. The bulk of the restructuring is due to be completed by 2028.
Mercedes-Benz has not yet announced the cessation of production in Germany. The future of the plants will depend on the outcome of negotiations regarding costs and the competitiveness of production.
