An “option” from factories: Mercedes stops “all further investments in the German locations”

In this country, an hour of work at Mercedes costs up to five times more than in Eastern Europe. Now the company is drawing conclusions. The human resources director wants to check “which locations we can still afford in Germany”.

In the discussion about labor costs, Mercedes-Benz is increasing the pressure on the works council and IG Metall and is threatening to close plants. Human Resources Director Britta Seeger explained in an interview published on the intranet that they wanted to put together a package that would have a noticeable impact and at the same time be socially sustainable. A quick agreement is not in sight. "We are therefore now forced to examine specifically and in detail which locations we can still afford in Germany. We all want to avoid factory closures at all costs. Unfortunately, we now have to pursue this option in more detail."

Because of the slump in profits in the car business, the board is demanding that employees work longer without wage compensation. Special payments, voluntary benefits such as profit sharing or holiday and Christmas bonuses are also available.

According to the intranet post, production director Michael Schiebe said that, despite numerous intensive discussions, no solution corridor could currently be identified and that it was not possible to invest in Germany with today's cost structures, the board had jointly decided to stop all further investments in the German locations. The costs of an hour of work in production in Germany are sometimes up to five times higher than in locations in Eastern Europe. The discrepancy is similarly high in administration.

A few weeks ago, production director Schiebe announced the closure of two plants in Germany if costs were not reduced. A German bodywork and a German powertrain plant would then be affected. Bodyworks are factories where cars are assembled. Components for the car are manufactured in powertrain factories.

In Germany, Mercedes-Benz has assembly plants in Sindelfingen as well as in Rastatt, Baden, and Bremen. There are further powertrain plants in Stuttgart-Untertürkheim, Affalterbach near Stuttgart, Berlin, Hamburg, Kamenz (Saxony) and Kölleda and Arnstadt (Thuringia). The car manufacturer has had to struggle with declining sales and slumping profits in recent years.