Mercedes-Benz Halts German Plant Investments After Labor Talks Collapse

Mercedes-Benz has halted further investments in its German manufacturing facilities after failing to reach an agreement with labor representatives and union officials over lowering labor costs, Novinky reported.

The decision follows months of pressure from management for employees to accept cost-cutting measures. In September, board member and production head Michael Schiebe warned workers that two German factories could face closure if cost reductions did not progress.

Despite the investment freeze, executives expressed hope that negotiations could still produce a breakthrough.

“We all want to avoid plant closures at all costs. Unfortunately, however, we now have to examine this option in more detail,” said board member Britta Seeger.

Mercedes-Benz faces intense pressure from lower-cost Chinese vehicle competition alongside high domestic manufacturing expenses. Last month, the automaker downgraded its financial outlook for the year, joining other major German manufacturers struggling with profitability.

Volkswagen recently announced the largest restructuring plan in its corporate history.

The Volkswagen group, which includes Škoda Auto, employed approximately 663 tisíc people at the end of last year and plans to eliminate up to 100 tisíc jobs globally by the end of the decade.

Mercedes-Benz operates three primary passenger vehicle assembly plants in Germany alongside several component factories for engines, transmissions, and batteries. The company also runs two van manufacturing sites within the country. Globally, the automaker maintains a network of approximately 30 production facilities.

* What prompted Mercedes-Benz to halt domestic investments? Management and labor representatives failed to reach an agreement on reducing labor costs across German factories.
* How many German vehicle assembly plants does the company operate?

Mercedes-Benz operates three main passenger car manufacturing plants in Germany, alongside component and van facilities.
* Which other German automaker recently announced major restructuring? Volkswagen announced a massive restructuring plan that includes cutting up to 100 tisíc jobs globally by the end of the decade.

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