Mercedes-Benz Suspends German Plant Investment, Evaluates Potential Closures

By Lutz Faupel

Published on 12 November 2026 – 20:22 GMT+1

Mercedes-Benz’s German production sites face mounting pressure as high labor costs and deadlocked negotiations with the works council and IG Metall prompt decisive action from the Stuttgart automaker. The management board has suspended all new investment at domestic facilities for now, while potential plant closures are being examined more concretely.

Mercedes Curbs Spending Amid Cost Pressures

According to reporting by bild.de, Human Resources Director Britta Seeger cited the company’s difficult cost position in justifying the decision. Mercedes must now assess which German sites can remain profitable over the long term. While Seeger emphasized that the company wants to avoid plant closures whenever possible, she acknowledged the option must now be taken more seriously.

Negotiations with employee representatives remain deadlocked, with no quick resolution in sight, Seeger said in an internal interview reported by zeit.de and citing Reuters. The objective is still a joint package that delivers significant savings while remaining socially acceptable.

Production costs lie at the heart of the dispute. Mercedes says hourly labor costs at its German plants can reach up to five times those at facilities in Eastern Europe. Consequently, management is seeking concessions on working conditions, including a proposal to extend working hours without raising pay.

Special payments—including profit sharing, holiday bonuses, and Christmas bonuses—could also face reductions. The demands have already sparked protests among the workforce.

Which German Plants Are at Risk?

Mercedes Production Chief Michael Schiebe indicated several weeks ago that two German plants could close if cost reductions are not achieved. Under current considerations, one vehicle assembly plant and one powertrain facility—where vehicle components are manufactured—would be affected.

According to zeit.de, Mercedes assembly operations include sites in Sindelfingen, Rastatt, and Bremen. Powertrain locations encompass Stuttgart-Untertürkheim, Affalterbach, Berlin, Hamburg, Kamenz, and sites in Thuringia. The specific plants potentially affected by closures have not yet been identified.

Industry-Wide Cost-Cutting at Volkswagen and Audi

The cost-cutting drive reflects both high site expenses and broader economic challenges. Mercedes-Benz has contended with declining sales and sliding profits in recent years.

The Stuttgart automaker is not alone. Volkswagen and Audi have also unveiled sweeping savings programs and job cuts.

Automotive expert Ferdinand Dudenhöffer told bild.de that these developments stem from long-standing competitiveness issues affecting Germany as a manufacturing location. He warns that without a fundamental overhaul of cost structures, Germany’s automotive industry risks further erosion of its competitive edge.

The Mercedes dispute underscores intensifying pressure across the German automotive sector. While the company seeks lower production costs, the works council and IG Metall are working to protect jobs and collectively bargained benefits. An agreement remains out of reach.

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