Mercedes-Benz has suspended all future investments in Germany, warning that it may be forced to shut down factories and move jobs to other states.
The German car manufacturer has already faced a decline in sales and profits in recent years, launching a wave of costs reduction measures that have already culminated in the decision to stop completely new investments in its factories in Germany, writes yahoo.com.
Michael Schiebe, the director of production at the company, has told the employees that the presiding board has jointly decided to stop all further investments at locations in Germany.
Meanwhile, Britta Seeger, responsible for the labour force in the company, said the directors would already consider concrete and detailed what locations in Germany could be financially affordable.
The decision comes at a time when the company is involved in a clash with trade unions over plans to cut costs.
The traffic giant, headquartered in Stuttgart, has been pushing ahead for months, with a plan that employees would work more hours without receiving additional wages.
IG Metall trade unions have rejected this proposal, while Seeger said there is currently no solution on the horizon.
If we fail to reach an agreement, we will take very tough measures, she warned.
Mercedes-Benz, just like other German giants Volkswagen ( VW and BMW are facing a decline in sales in China, which was once one of the main sources of company growth.
Mercedes car sales in China dropped by 8 percent in the third quarter, compared to the same period a year ago. Chinese consumers are either limiting spending, or choosing cheaper cars produced by local companies.
Meanwhile, German car producers are facing difficulties competing with the entry of cheaper Chinese models into the European market, while in the United States they have also faced customs duties.
Last month, Mercedes cut the 2026 profit margin by two percentage points to 2 to 3 percent. The company said profits are expected to remain at the same level.
The automobile giant aims to save 800m euros, including through the growth of the work week from 35 hours to at least 38 hours, as well as the possibility of reducing holiday bonuses, reports German media.
If we don’t increase productivity in the country and do not cut costs, we will hardly be able to invest here, Seeger said.
Mercedes-Benz has about 108 thousand employees in Germany, making up approximately two-thirds of its global workforce.
The company has 11 factories in Germany, while operating also in China, the US, Poland, Romania, Hungary, Spain and South Africa.
Some of its German factories are more than 100 years old, but workers fear they could be closed and production moved to Eastern Europe.
Mercedes-Benz factory in Kecskemét, Hungary, has become the company’s largest factory this year
Source Layer: Insander