The brakes are on for Mercedes' Germany plan

Mercedes Germany has suspended its investment plans and all planned additional spending on facilities in the country has stopped. The decision came after cost talks between management and employee representatives stalled. However, the company does not say for certain that any factories will be closed yet.

According to Automotive News, based on an internal statement shared with employees, the management decided to stop new investments in facilities in Germany. Production manager Michael Schiebe said the decision was made jointly by the board of directors.

Britta Seeger, director of human resources, stated that they wanted to prevent factory closures. However, he added that at this point they have to examine this possibility in more detail. The talks are currently stalled.

A warning was issued for two factories in September.

Mercedes has been expecting steps from its employee representatives to reduce labor costs for a while. Schiebe had warned in September that two factories in Germany could close if there was no progress in the talks.

In the last statement, it was not said which facilities were at risk. There is no final closing decision.

The problem also extended to suppliers

The challenge is not just for Mercedes. Increasing competition in China is weakening one of the important sources of income for German brands. The same competitors continue to grow in the European market.

Automotive supplier Schaeffler announced last week that it would cut 3,460 jobs in Europe, citing weakening demand for internal combustion engine vehicles. The company will close five facilities, four of which are in Germany.

At least 200,000 automotive jobs could be lost in Germany by 2030, according to a forecast by consultancy firm Roland Berger. Industry analyst Ferdinand Dudenhöffer reminded that Mercedes has been talking about the difficult conditions in Germany for months. According to him, the latest decision is not a surprise.

The next step for now is whether to restart discussions with employee representatives about costs. It was not disclosed which two factories were at risk.