Investment suspension decision from Mercedes-Benz

Increasing production costs and weakening demand in the German automotive industry are causing the country's leading manufacturers to face difficult decisions.

According to Reuters, based on an internal information note sent to employees, Mercedes-Benz has decided to stop all new investments in its factories in Germany.

This step of the company came after no agreement was reached in the negotiations with worker representatives and unions on reducing labor costs.

Mercedes-Benz Board Member Responsible for Production Michael Schiebe announced that the decision to stop new investments in the company's facilities in Germany was taken jointly.

Schiebe had previously warned employees that two factories in Germany could be closed if no progress was made in reducing costs.

Mercedes-Benz management began to evaluate the factory closure option in more detail while negotiations to reduce costs continued.

Britta Seeger, Member of the Company's Board of Directors, said in the information note sent to employees, "We all want to prevent factory closures at all costs. However, unfortunately, we now have to examine this option in more detail."

While negotiations with Germany's largest union, IG Metall, continue, it is noted that the crisis in the automotive sector has spread to other manufacturers and suppliers.

While Volkswagen is facing the most comprehensive restructuring process in its history, the possibility of closing four of its factories and up to 100 thousand people losing their jobs is on the agenda.

Automotive supplier Schaeffler announced its plan to close five facilities in Europe and lay off 3,460 people, citing the weakening demand for internal combustion engine vehicles. Four of the facilities planned to be closed are located in Germany.

Automotive industry analyst Ferdi Dudenhoeffer stated that Mercedes-Benz's decision was not a surprise and that the company had been drawing attention to the difficult production conditions in Germany for months.

Consulting company Roland Berger warned that at least 200 thousand automotive jobs could be lost in Germany by 2030 due to intense competition in the Chinese market and increasing costs in Europe.