Automotive News Europe — 2026-11-12
Automotive Industry
Mercedes-Benz is halting all investment in its German plants and exploring site closures after failing to agree with worker representatives on labor cost cuts, according to a memo to employees.
Mercedes decided to suspend investments because it cannot agree with its works council and union representatives on labor cost reductions, according to an interview with executive board members shared on the company’s intranet.
Mercedes’ production chief Michael Schiebe said in the memo that management had “jointly decided to halt all further investments in our German locations.”
Labor director Britta Seeger said: “We all want to avoid plant closures at all costs. Unfortunately, however, we must now explore this option in more detail.”
Mercedes has been pushing workers to find cost savings. In September, Schiebe warned staff that two plants could close in Germany if there was no progress on the issue.
The move escalates Germany’s auto crisis, which has already forced the biggest restructuring in Volkswagen Group’s history and threatens tens of thousands of jobs in the country’s most important industry.
In a sign of how quickly the crisis is spreading throughout the supply chain, Schaeffler said last week it would cut 3,460 jobs and close five sites in Europe, four of them in Germany, citing weak demand for combustion-engine vehicles.
Mercedes’ plant closure warning comes as negotiations continue with the IG Metall union, Germany’s biggest.
VW Group starts its own negotiations with the union on Nov. 24, with strikes looming at the turn of the year amid tensions over plans that could lead to 100,000 job losses and the closure of up to four German plants.
Consultancy Roland Berger has warned that at least 200,000 automotive jobs could be lost in Germany by 2030, after China fell away as a key profit driver due to intense competition. Those Chinese rivals are now gaining market share in Europe, prompting executives to call for the European Union to implement protectionist measures.
Auto sector analyst Ferdinand Dudenhoeffer said that with the industry facing its deepest-ever crisis, the Mercedes news came as little surprise. “For months, Mercedes has been emphasizing just how difficult the situation is in Germany,” he said, adding that the future of the industry was in the balance unless its cost structures could be overhauled.