Nov 12, 9:04 PM
Mercedes-Benz Freezes German Plant Investments Amid Union Impasse
High domestic production costs push the Stuttgart carmaker to consider plant closures as labor negotiations stall.
Mercedes-Benz has suspended all new investments at its German manufacturing plants as negotiations with labor representatives over cost-cutting measures remain deadlocked. Human Resources Director Britta Seeger confirmed the decision, stating that the carmaker must evaluate which domestic locations can remain profitable in the long term.
The management board is now examining potential plant closures more concrete than in previous rounds of talks. Head of Production Michael Schiebe previously indicated that failing to lower operational costs could result in the shutdown of up to two domestic sites, comprising one vehicle assembly facility and one powertrain component plant. Mercedes-Benz operates vehicle assembly operations in Sindelfingen, Rastatt, and Bremen, alongside powertrain manufacturing facilities in Berlin, Hamburg, Kamenz, Affalterbach, Stuttgart-Untertürkheim, and locations in Thuringia.
The central point of contention remains the disparity in production costs between domestic and foreign facilities. Company figures show that labor costs per hour at German sites can reach up to five times the levels recorded at production plants in Eastern Europe. To narrow this gap, management has proposed extending weekly working hours without extra compensation, alongside potential reductions to holiday bonuses, Christmas payments, and employee profit-sharing schemes. These proposals have met opposition and sparked protests among the workforce.
Seeger stated that while management aims to avoid closures through a mutually agreed savings plan, discussions with the works council and the IG Metall union have reached an impasse. Employee representatives continue to resist cuts to collectively agreed benefits and demand guarantees for existing jobs.
The investment freeze at Mercedes-Benz reflects wider pressure across the German automotive sector. Competitors including Volkswagen and its subsidiary Audi have recently announced major restructuring efforts and job reductions to cope with declining sales volumes and shrinking operating margins. Automotive industry analyst Ferdinand Dudenhöffer noted that the current crisis stems from structural cost disadvantages in Germany, warning that the domestic industry faces further loss of international competitiveness unless cost structures undergo fundamental changes. Negotiations between Mercedes-Benz management and union representatives are set to continue without a formal agreement in place.
Written by Sandy van Dongen sandy.vandongen@alpineweekly.com
