Mercedes to halt German investments, mulling plant closures
FRANKFURT: Struggling German carmaker Mercedes-Benz announced Thursday it will halt all investment in Germany and is mulling plant closures, underlining the woes facing the country’s automotive sector. Like its German peers, Mercedes has been battered by Chinese competition and high costs, and last month became the third big German carmaker to cut its outlook for the year. Its management has been…
Mercedes-Benz has announced plans to cease all investment in Germany and is considering closing plants, highlighting the challenges facing the country's automotive industry. Like its German competitors, the company has faced pressure from Chinese competition and rising costs, leading to a reduction in its financial outlook last month.
This marked the third major German automaker to lower its expectations for the year. Management has been engaged in discussions with staff representatives to identify cost-saving measures, but progress appears to be limited. Board member Michael Schiebe disclosed in an internal company communication that the executive board has jointly decided to halt further investments in German facilities.
Despite extensive negotiations, they have been unable to reach an agreement with unions, expressing frustration over the lack of progress. "We are now forced to carefully examine which German sites would need to be closed if we cannot bring about a change in the cost structure," Schiebe stated.
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