Mercedes is stopping investments in Germany. Plant closures are also under consideration.
Mercedes’ management has failed to reach an agreement with employees on reducing labor costs. Unions reject plant closures and demand a plan for the plants’ future.
Further investments halted
Mercedes-Benz has suspended all further investments in its German plants. The management’s decision was announced by production chief Michael Schiebe in an internal conversation made public to employees on Thursday, November 12. Reuters obtained the document.
The automaker cites high costs and the lack of an agreement with the works council and the IG Metall union as reasons for this move. Schiebe warned employees in September that without progress in finding savings, two German plants could be at risk.
Management is now working on a more detailed plan for closing them. Board member Britta Seeger said the company wants to avoid shutting down factories, but it must first assess which locations it can afford under current conditions. A final decision on closing any specific plant has not yet been made.
Dispute over working hours and bonuses
According to Handelsblatt, Mercedes aims to save around 800 million euros per year in labor costs in Germany, which is approximately 19.5 billion crowns. The measures under consideration include longer working hours and restrictions on bonuses, such as Christmas and vacation allowances or profit shares.
Employee representatives are harshly criticizing the management’s approach. In a statement dated November 13, IG Metall rejected the closure of factories and demanded concrete prospects for German plants. According to regional union leader Jan Ott, costs cannot be unilaterally shifted onto employees, nor should negotiations be based on threats.
Ergun Lümali, chairman of the company-wide council, warned that instead of investing in innovation, robotics, and new products, management is threatening to shift production to Eastern Europe. The unions, meanwhile, declare their willingness to find solutions that preserve jobs and factories.
Hungarian plant gaining greater capacity
The factory in Kecskemét, Hungary, also plays a role in decisions regarding future production, as internal documents indicate that labor costs there are significantly lower than in Germany.
Mercedes states in its investment presentation that it plans to double the capacity of this plant to 400,000 cars per year. The expansion provides more room to distribute production across different countries. However, the automaker has not announced the relocation of any specific model from the troubled German factory to Hungary in connection with the current dispute.
Sources:
Original text / Elektrickevozy.cz
Reuters
IG Metall
Handelsblatt
Golem
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