Mercedes-Benz suspends new investment in Germany and plans to close factories in the countries if it cannot reduce costs there
In an internal interview broadcast to employees, members of the Mercedes-Benz management board declared that the group would examine the option of closing factories in Germany.
The crisis-hit automobile giant Mercedes-Benz announced on Thursday that it was considering closing factories in Germany and suspending any new investments in the country, believing it had to drastically reduce its production costs in the face of increasingly intense Chinese competition. In an interview broadcast internally to employees, board member Britta Seeger deemed it necessary to "examine in a more concrete manner" the option of closing production sites. Faced with a sharp decline in its sales in China which is weighing on its profits, the Stuttgart manufacturer is negotiating new cost-saving measures with staff representatives in order to restore its competitiveness.
“We are now forced to carefully examine which German sites we should close if we fail to change our cost structure,” explained another board member, Michael Schiebe, quoted in the interview. “We will then manufacture the next models exclusively abroad,” he added. "No solution corridor is emerging" The manager also announced the cessation of any new investment in the group's German sites as long as no agreement enabling cost reductions has been found.
According to him, decisions regarding the next generation of vehicles must be made now, which increases pressure on the ongoing negotiations. These are taking place in particular against the backdrop of salary discussions with the IG Metall union, which is demanding a 5% increase in salaries, deemed "totally excessive" by Britta Seeger. “Such an increase would further increase labor costs, already high in Germany, while today they are already far too high in international comparison,” she said.
To relaunch itself, the group is also banking on a vast “productivity offensive”. But "despite intensive discussions, unfortunately no solution corridor is emerging for the moment", according to Britta Seeger. Mercedes-Benz is considering an increase in working hours without salary compensation and is calling into question the 35-hour week, a historic achievement of the metallurgical industry which includes the automobile in Germany.
“These are uncomfortable subjects,” admitted Britta Seeger, but according to her it is “the only way to preserve employment in Germany”.
Machine-translated from French
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- BFM Business12 Nov, 18:45
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