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Mercedes-Benz freezes German investment and weighs plant closures

Carmaker suspends new spending at German sites after deadlocked talks with works council and IG Metall over high labour costs.

By 12 Nov 2026 · 19:30 CET Updated 12 Nov 2026 · 19:30 CET
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⚡ EXECUTIVE DISPATCH BRIEF Verified · Politics
  • Core Briefing: Mercedes-Benz freezes German investment and weighs plant closures
  • Strategic Context: Carmaker suspends new spending at German sites after deadlocked talks with works council and IG Metall over high labour costs.
  • Fact Checking & Evidence: Documented status is verified across primary accredited European reporting wires and official filings.
  • Editorial Integrity: Independent coverage adhering to the Europa Express European Press Standards and source verification framework.

AI disclosure: Summarised and contextualised from a named source by an AI model with editorial rules; links to original report.

Mercedes-Benz has halted all new investment at its German production sites and is now considering concrete plant closures, citing high labour costs and stalled negotiations with employee representatives. HR director Britta Seeger told an internal interview reported by zeit.de that the company must examine which German locations can be operated profitably long term, adding that while closures are to be avoided as far as possible, the option must be pursued more seriously than before.

Talks with the works council and IG Metall are described as deadlocked, with no swift agreement in sight. Mercedes says an hour of labour in its German plants can cost up to five times as much as at sites in Eastern Europe, and management is demanding concessions on working conditions. Proposals under discussion include extending working hours without extra pay and cutting special payments such as profit sharing, holiday bonuses and Christmas bonuses, which have already sparked employee protests.

Head of production Michael Schiebe warned weeks ago that two German plants could close if cost reductions fail to materialise, affecting one vehicle assembly plant and one powertrain plant. Mercedes operates assembly plants in Sindelfingen, Rastatt and Bremen, and powertrain sites in Stuttgart-Untertürkheim, Affalterbach, Berlin, Hamburg, Kamenz and locations in Thuringia, though no specific plants have been named for possible closure.

The cost cutting drive reflects broader economic difficulties at Mercedes-Benz, which has struggled with falling sales and slumping profits in recent years. Volkswagen and Audi have also announced extensive savings programmes and job cuts. Automotive expert Ferdinand Dudenhöffer told bild.de the developments stem from long known competitiveness problems of Germany as a car manufacturing location, warning that without fundamental cost structure changes the industry risks losing further competitiveness.

Source: Euronews. Read the original report ↗

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