Mercedes-Benz halts new investment in German plants, considers closures
The Stuttgart carmaker is temporarily halting all further investment at its German sites. Possible plant closures are looming, increasing pressure on staff, works council and IG Metall. Volkswagen and Audi have also announced major savings programmes.
Mercedes-Benz has halted further investment in its German production sites due to high labor costs and stalled negotiations with the works council and IG Metall union. The German carmaker is now evaluating the long-term profitability of its German locations in light of the strained financial situation. HR director Britta Seeger stated that while closures are being considered, the company aims to avoid them at all costs.
The main issue at hand is the significant disparity in labor costs, with German plants costing up to five times more per hour than Eastern European sites. The board is demanding concessions on working conditions, which could include extending hours without pay increases and cuts to special payments like profit sharing, holiday bonuses, and Christmas bonuses.
If cost reductions prove unsuccessful, Mercedes may close one assembly plant and one powertrain plant, potentially impacting production hubs in Sindelfingen, Rastatt, or Bremen. Meanwhile, Volkswagen and Audi are also undergoing cost-cutting measures, reflecting broader challenges facing Germany's automotive industry.
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