German automaker Mercedes-Benz announced a suspension of new investments in its manufacturing plants in Germany. At the same time, the group's management has begun a more detailed assessment of possible plant closures amid high production costs and lack of progress in negotiations with employee representatives.
This was reported on Thursday, November 12, by Welt, citing the German agency dpa and statements from Mercedes-Benz management.
According to member of the group's board responsible for production, Michael Schiebe, the company decided to halt all further investments in German plants due to the high cost of production.
The decision was taken jointly by the group's management after numerous negotiations on cost reduction, which have not yet yielded the expected results.
Schiebe explained that the cost of one working hour at Mercedes-Benz production plants in Germany in some cases is five times higher than comparable figures at the company's plants in Eastern Europe. A comparable difference is also observed in administrative units.
According to the top manager, under the current cost structure the company sees no possibility of continuing new investments in German production sites.
Mercedes-Benz board member for human resources Britta Seeger stated that the group is forced to thoroughly examine the economic viability of maintaining individual plants in Germany.
She stressed that management seeks to avoid plant closures, but against the background of the lack of agreements with employee representatives, this option has to be considered increasingly seriously.
The company continues negotiations with works councils and the IG Metall union on reducing personnel costs. Management expects to agree on measures that will ensure tangible savings and at the same time be socially acceptable for employees.
However, according to Seeger, a quick agreement is not expected for the time being.
Back in September, Schiebe warned that if there is no substantial cost reduction, Mercedes-Benz could close two plants in Germany — one car assembly plant and one powertrain components production facility.
The group's car plants are located in Sindelfingen, Rastatt and Bremen. Plants producing engines, transmissions and other components operate, in particular, in Stuttgart-Untertürkheim, Berlin, Hamburg and a number of other German cities.
At the same time, Mercedes-Benz has not yet made a final decision on closing specific plants. The company also did not specify for how long it is suspending new investments and which projects will be affected.
The tightening of cost policy comes against the backdrop of deteriorating financial results of the group. In recent years, Mercedes-Benz has faced declining sales and profits. Additional pressure comes from competition in the Chinese automotive market, which is of great importance to the German manufacturer.
As part of the cost reduction program, the company has already discussed increasing the length of the working week without a corresponding increase in pay. These proposals met with resistance from unions and employee representatives.
The future of Mercedes-Benz's German plants will depend on the results of negotiations between management and employees and the ability to reduce production costs.
Based on materials from: Welt / dpa, SWR.
