---
title: "Mercedes-Benz Freezes German Investments and Prepares Two Plant Closures: Union Talks at a Standstill"
description: "Mercedes-Benz has suspended all further investments in German units and is considering closing two plants amid a deadlock in negotiations with the IG Metall union."
date: 2026-11-12T20:14:44.938Z
lang: en
url: https://xab.info/en/posts/mercedes-benz-freezes-german-investments-plant-closures
tags: [mercedes-benz, germany, auto-industry, labor-dispute, factory-closures, ig-metall]
author: "Andrey Kosynko"
publisher: "XAB.info"
---

# Mercedes-Benz Freezes German Investments and Prepares Two Plant Closures: Union Talks at a Standstill

![Mercedes-Benz brand logo on the radiator grille of a silver car](https://xab.info/media/2026/11/12/mercedes-benz-priostanavlivayet-investitsii-v-germanii-zakritie-zavodov/mercedes-benz-priostanavlivayet-investitsii-v-germanii-zakritie-zavodov-1.webp)

## Key Points

- The Mercedes-Benz board has completely suspended investments in German plants due to high costs and a deadlock in union negotiations
- One assembly plant and one powertrain plant are at risk of closure; specific sites have not been named
- Hourly labor costs at the group's German facilities are in some cases up to five times higher than in Eastern Europe
- Volkswagen and Audi have also announced similar cost-cutting programs, signaling a systemic crisis in the German automotive industry

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.

## Fact-Check & Sources

- [Mercedes-Benz приостанавливает инвестиции в Германии и рассматривает закрытие заводов](https://ru.euronews.com/2026/11/12/will-factories-close-mercedes-no-longer-wants-to-invest-in-germany) - Primary source: internal interview with Britta Seeger, data on fivefold cost difference, list of plants, quote from Michael Schiebe, commentary from Ferdinand Dudenhöffer.
- [Mercedes-Benz приостанавливает инвестиции в Германии на фоне угрозы закрытия заводов — СМИ](https://unn.ua/ru/news/mercedes-benz-priostanavlivaet-investitsii-v-germanii-na-fone-ugrozi-zakritiya-zavodov-smi) - Confirms the existence of the internal memo, quotes Michael Schiebe on investment suspension, cites Reuters. Mentions the closure of two plants.
- [Сотрудникам Mercedes-Benz в Германии предложили поработать бесплатно](https://motor.ru/news/sotrudnikam-mercedes-benz-v-germanii-predlozhili-porabotat-besplatno-27-06-2026.htm) - Contextual source (June 2026): records employee protests and discussions regarding the transition from a 35-hour work week, which aligns with management's demands for increased working hours.

## FAQ

### Why did Mercedes-Benz suspend investments in Germany?

The board made this decision due to high production costs and the inability to reach an agreement with the Works Council and the IG Metall union on reducing labor costs. Hourly labor costs at German plants are in some cases up to five times higher than in Eastern Europe.

### How many plants might be closed and which ones?

According to Michael Schiebe, two facilities are at risk: one assembly plant and one powertrain plant. Specific sites have not been named. Mercedes assembly plants in Germany are in Sindelfingen, Rastatt, and Bremen; powertrain plants are in Stuttgart-Untertürkheim, Affalterbach, Berlin, Hamburg, Kamenz, and Thuringia.

### What does Mercedes demand from the union during negotiations?

The company is discussing increasing working hours while keeping current pay levels, as well as potentially reducing additional benefits like profit sharing, vacation pay, and Christmas bonuses. The goal is a comprehensive package for tangible savings while ensuring social viability.

### Are the problems at Mercedes unique to the company?

No. Volkswagen and Audi have also announced extensive cost-cutting and staff reduction programs. Expert Ferdinand Dudenhöffer characterizes this as a result of long-standing competitiveness issues within the entire German automotive sector.