Mercedes-Benz Halts New Investments in Germany
Mercedes-Benz announced on Thursday that it is stopping all new investments at its German facilities. The company cited high labor costs and stalled talks with employee representatives as reasons for this decision. This move comes as the works council and the IG Metall trade union increase pressure on the company. Mercedes-Benz is now evaluating the future of its production sites in Germany.
The management board stated that it must look at which locations can be kept profitable. Britta Seeger, a board member, highlighted the need to avoid plant closures. However, she noted that this option must be taken more seriously. "We all want to avoid plant closures at all costs," she said in an internal interview, as reported by DW.
Mercedes-Benz is facing major challenges, including falling sales and profits. This is especially true in its largest market, China, where sales dropped by about 19% in 2025. The company has invested a lot in electric vehicles, but demand in Europe and North America has not met expectations. Labor costs in Germany can be up to five times higher than in Eastern Europe. This has led the company to seek concessions on working conditions. Proposed changes include longer working hours without pay increases and cuts to special payments like profit sharing and holiday bonuses.
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The decision to stop investments and consider plant closures could hurt the German automotive sector. This is especially true for suppliers and related industries. Higher production costs and possible job losses may reduce consumer confidence and spending in the region. Investors will be watching for more updates on negotiations with labor representatives and any news about specific plant closures.