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Mercedes threatens to close all factories in Germany

2026-11-14 23:04:06Biznes SHKRUAR NGA REDAKSIA VOX

Mercedes threatens to close all factories in Germany

There is still no sign of a solution in the cost-cutting talks at Mercedes. Now the company's executives have suspended all investments in its factories in Germany and want to consider closing them.

At the car manufacturer Mercedes, cost negotiations with the works council and the IG Metall union have stalled. In this situation, the company's management has announced that they will consider closing factories in Germany due to high production costs. It has also been decided to "stop all further investments in factories in Germany," said production director Michael Schiebe in an interview published on the company's intranet.

Despite numerous and intensive talks, there is currently no "solution corridor" in sight and, with the current cost structure, it is not possible to invest in Germany, argued Schiebe.

Managers demand concessions from employees

With these announcements, the company is increasing the pressure on employees. The company needs a decision in the negotiations with the works council so that the employees can make some concessions, said HR Director Britta Seeger.

"Currently, such a decision does not seem to be on the horizon. Therefore, we are now forced to examine specifically and in detail which factories in Germany we can continue to operate." According to her, closures should be avoided "at all costs," but now unfortunately this possibility must be examined more specifically.

Production director Schiebe emphasized in the interview that the cost of an hour of work in production in Germany is in some cases up to five times higher than in factories in Eastern Europe. If an agreement is not reached, the new models will only be produced outside Germany.

Seeger also referred to the current wage negotiations in the metallurgical and electrical industries. IG Metall is demanding a five percent wage increase. “Such an increase would further increase the already high labor costs in Germany, which are already very high by international standards.”

A 40-hour work week is required instead of the 35-hour one.

In total, Mercedes has twelve production centers in Germany. The company is currently holding talks about a so-called "productivity offensive" aimed at reducing costs.

Due to falling profits in the automotive sector, managers are demanding that employees work longer hours without additional pay. A 40-hour workweek instead of 35 hours is being discussed. For the works council and IG Metall, this is a red line, as the 35-hour week is considered one of the union's major achievements.

The conditions under which the agreement on reduced working hours was reached then no longer exist, Seeger argued. According to her, a larger number of working hours could quickly increase productivity, without directly affecting employees' wages. However, management also intends to intervene in additional payments, voluntary benefits such as profit sharing, as well as components determined by collective agreements, such as bonuses for holidays and Christmas.

“In an extremely challenging environment”

Schiebe said he understands that “the measures being discussed demand a lot from our employees.” But action must be taken now: “We are in an extremely challenging environment, characterized by tariffs, price pressure, lower market demand and strong competition, especially from China.”

Seeger stated that the company's executives will also accept financial sacrifices. According to her, executives have not received a salary increase in the last two rounds of salary increases.

Mercedes has been struggling with declining sales and profits in recent years. Schiebe discussed the possibility of closing two factories in Germany a few weeks ago if costs are not reduced. This would affect a German body assembly plant and a German powertrain plant. The powertrain plants produce components for vehicles.


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