Newshot Mercedes-Benz Freezes All New Investment in Germany and Weighs Plant Closures: Investment in Germany No Longer Viable
Mercedes-Benz Freezes All New Investment in Germany and Weighs Plant Closures: Investment in Germany No Longer Viable
IT Home, November 13 — According to a report by Xinhua today, Mercedes-Benz announced on November 12 local time that it has decided to freeze all further investment in its production facilities in Germany and has begun assessing the possibility of closing some German plants.
The decision was made after negotiations with the union over labor cost cuts reached a deadlock, marking a significant escalation of the crisis in the German automotive industry.
Mercedes-Benz production director 迈克尔 · 希贝 said on the company intranet that the executive board has jointly decided to suspend all further investment in German plants, on the grounds that "with the current cost structure, investment in Germany is no longer viable."
According to dpa, labor costs per working hour at German plants are in some cases five times those at Eastern European plants, and the cost gap in administrative areas is similarly large.
The remarks of HR director 布里塔 · 西格尔 further clarified the severity of the situation. She said, "We all want to avoid plant closures at all costs, but unfortunately we now have to consider this option more concretely."
希贝 had warned in September that if costs cannot be reduced, one vehicle assembly plant and one powertrain plant in Germany could face closure.
Mercedes-Benz currently has three vehicle assembly plants in Germany, located in Sindelfingen, Rastatt and Bremen; its powertrain and components plants are distributed in Stuttgart-Untertürkheim, Affalterbach, Berlin, Hamburg, Kamenz and other locations. The company has not yet specified which sites could be affected.
IT Home note: The adjusted return on sales for Mercedes-Benz's Cars division fell to 2.5% in the third quarter of 2026 from 4.8% in the same period last year, and its full-year margin guidance was also lowered from 3%–5% to 2%–3%. The compression of profit margins has weakened the company's room to maintain high-cost domestic capacity and made it harder for labor and management to bridge their differences over the scale of cuts.
Of course, Mercedes-Benz is not an isolated case. Volkswagen Group has already launched the largest restructuring in its history, considering closing up to four plants in Germany; supplier Schaeffler also announced last week that, due to weak demand for combustion-engine vehicles, it will cut 3,460 jobs in Europe and close five plants, four of which are in Germany. The German automotive industry is facing combined pressure from cost structure, shifting demand and changes in the competitive landscape.
As of now, negotiations between Mercedes-Benz and IG Metall are still ongoing, but the company says it sees no path to consensus in the short term. Sieber's wording in internal communications was: "We must act immediately; we are in an extremely difficult environment."
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