The board of Mercedes-Benz has decided to completely suspend all further investments in its German production facilities. This became known from an internal memo to employees, which was reviewed by Reuters on Thursday, November 12, 2026. According to Bild, Board Member for Human Resources Britta Seeger explained the move by stating that the group must verify which specific sites in Germany can remain economically viable in the long term. Seeger emphasized that the company still strives to avoid plant closures, but this option must now be considered "much more seriously."
Deadlock in Talks with IG Metall
The direct trigger for the decision was the stalled negotiations with the Works Council and the IG Metall union. According to Seeger, an early agreement is not currently in sight. The goal of the negotiations remains an overall package of measures that would allow for tangible savings while maintaining social acceptance for employees. However, the parties have failed to reach a compromise: management demands concessions on working conditions, while the union insists on maintaining existing guarantees. An internal interview detailing these statements was published on the company's corporate network and shared with the media via Reuters.
Fivefold Difference in Hourly Labor Costs
At the center of the conflict are production costs. According to internal Mercedes-Benz data, an hour of labor at German plants can, in some cases, cost up to five times more than at the group's plants in Eastern Europe. This asymmetry, according to the board, makes the continued operation of all German sites in their current format unfeasible. Measures being discussed to reduce costs include increasing working hours while maintaining current pay levels, as well as reducing additional benefits—profit sharing, vacation pay, and Christmas bonuses. These demands have already sparked protests among staff, and in June 2026, according to Motor.ru, some employees expressed outrage over a proposal to work without pay.
Which Plants Are at Risk
Board Member for Production Michael Schiebe warned several weeks ago that if costs are not reduced, two German plants could be closed. Under current plans, one assembly plant and one so-called powertrain plant, where vehicle components are produced, are at risk. Mercedes operates assembly plants in Sindelfingen, Rastatt, and Bremen; powertrain plants are located in Stuttgart-Untertürkheim, Affalterbach, Berlin, Hamburg, Kamenz, and Thuringia. The company has not yet disclosed which specific sites may be affected.
Systemic Crisis in the German Auto Industry
The cost-cutting measures at Mercedes-Benz are driven not only by internal costs but also by the group's general economic difficulties: the company has faced declining sales and falling profits in recent years. These problems are not unique to the Stuttgart-based manufacturer—Volkswagen and Audi have also announced extensive cost-cutting and downsizing programs. Automotive expert Ferdinand Dudenhöffer, according to Bild, views the situation as a consequence of long-standing competitiveness issues in the German automotive sector: without a radical restructuring of costs, the industry risks losing more ground in the global market. The conflict at Mercedes-Benz thus illustrates the growing systemic pressure on the German automotive industry, where no agreement is yet in sight between management, seeking to lower costs, and the union, aiming to preserve jobs and collective bargaining benefits.
