Mercedes-Benz Halts New Investments in Germany Amid Factory Closure Risk

Mercedes-Benz management announced that all new investments at its German production facilities have been halted after cost-cutting negotiations with employee representatives failed to reach an agreement. Production board member Michael Schiebe stated that the supervisory board jointly decided to stop further investments at German sites.

Britta Seeger, the board member responsible for human resources, said intensive talks had not produced a concrete solution. She added that the company is now forced to examine in detail which facilities can continue operating in Germany under current economic conditions.

“We have decided jointly at the supervisory board to stop all further investments at the German facilities.”

Management warned that if no agreement is reached on cost reductions, one vehicle assembly plant and one engine production plant could be closed. No final decision has yet been announced on which specific factories might shut down.

The dispute centers on Mercedes-Benz's demand to reduce labor costs at German plants, which management says have become excessively expensive compared with other countries where the group operates. One key proposal is to increase the weekly working week from 35 to 38 hours without a corresponding pay increase.

The company is also considering cuts to additional benefits, including Christmas and vacation allowances, as well as profit-linked bonuses. According to a previous WirtschaftsWoche report cited by Lifo, Mercedes-Benz aims to save around 800 million euros.

The investment freeze was announced on Thursday, November 12, through an internal company interview published on Mercedes-Benz's internal network and later obtained by German business newspaper Handelsblatt. The outcome of the ongoing cost talks will be decisive for the future of German automotive production and the thousands of employees at Mercedes-Benz plants across Germany.