Mercedes Halts New German Investment and Weighs Plant Closures

Mercedes-Benz production chief Michael Schiebe and labor director Britta Seeger set out the decision in an interview posted on the company’s intranet on Thursday. Reuters, AFP and German newspapers reviewed the text, and a company spokesman confirmed the remarks.

Board Cites Labor Costs

Schiebe said the executive board had “jointly decided to halt all further investments in German sites,” arguing that Mercedes could not invest in Germany under today’s cost structures.

A working hour in German production was “in some cases up to five times higher” than at the group’s plants in Eastern Europe, he said, with a similar gap in administration.

Seeger said months of talks had still produced no “solution corridor,” and that options discussed with employee representatives “are far from sufficient.”

“We are now forced to examine specifically and in detail which sites we can still afford in Germany,” she said. “We all want to avoid plant closures at all costs. But we now unfortunately have to pursue this option more concretely.”

Two Plants Already Flagged

At works meetings in October, Schiebe had warned that one German assembly plant and one powertrain plant could close if costs were not reduced. The company has not named any site.

Vehicle assembly in Germany is concentrated at Sindelfingen, Rastatt and Bremen. Powertrain operations include Stuttgart-Untertürkheim, Hamburg, Berlin and plants in Saxony and Thuringia.

Schiebe said successor models would then be built only abroad, while adding that his aim was still to keep all German locations. Seeger said the board had told the supervisory board it wanted to waive part of its own pay.

The central works council was not immediately available for comment, WirtschaftsWoche reported. IG Metall has opposed the planned cuts.

Management has for months asked German staff to work longer hours for the same pay, a demand that sits in a wider industry push to reopen the 35-hour week. WirtschaftsWoche said Mercedes is seeking savings of up to €800 million.

Profit Outlook Already Cut

The pressure follows a sharp downturn in the car business. Last month Mercedes cut its 2026 core profit outlook to a flat €5.8 billion, abandoning a forecast of at least 15% growth, and lowered its cars-division margin target to 2%–3% from 3%–5%.

Vehicle deliveries in China fell 29% in the first nine months of 2026. Volkswagen is already cutting jobs and preparing to close or repurpose German plants, as job losses mount across the country’s car industry.

Mercedes shares were lower on Thursday, falling as much as about 1.6% to €40.77 on Xetra, according to dpa-AFX. A day earlier, Chief Executive Ola Källenius told a Süddeutsche Zeitung conference in Berlin that the company wanted “real change,” not a “lazy compromise,” on German labor costs.