Economy · Explainer
Mercedes Freezes New German Investment, Weighs Closures
New investment is on hold amid a labor-cost dispute. Existing projects continue, while possible plant closures remain under review.
Kunkafa News · Published · 2 min read
By Kareem FaridDiscuss with the author on X
Key points
- Mercedes has frozen further investment at German sites amid stalled cost talks.
- Projects already under way are exempt, including Sindelfingen’s new paint shop.
- One vehicle plant and one powertrain plant face a possible closure review; no sites have been named.
Mercedes-Benz has halted further investment at its German sites and is examining possible factory closures after talks on labor costs stalled, Reuters reported on November 12, citing an internal interview with executives [1].
Mercedes told Automobil Produktion on November 13 that ongoing projects are exempt, including Sindelfingen’s new paint shop [2].
Which factories could close?
Mercedes confirmed to the publication that closure of one German vehicle plant and one powertrain plant remains an option if costs do not fall. It declined to identify locations. The reporting describes a conditional review, with no named closure list or shutdown timetable [2].
Longer hours at the center of the dispute
Management wants longer working hours without a corresponding pay increase, with a shift from 35 to 40 hours discussed, German public broadcaster ARD reported. The works council and IG Metall oppose abandoning the 35-hour week. Management is also seeking cuts to bonuses and other benefits [3].
Production chief Michael Schiebe cited tariffs, pricing pressure, weaker demand and competition, particularly from China. He said hourly production costs at some German sites were up to five times those in Eastern Europe, according to ARD [3].
Workers demand investment commitments
In a November 13 statement, works-council chairman Ergun Lümali rejected closures and urged investment in innovation and products at German sites. Barbara Resch, IG Metall’s Baden-Württemberg regional leader, called for binding commitments on future products and investment and said the union was ready to negotiate workable solutions [4].
Resch criticized the combination of an investment freeze and demands for longer hours and reduced benefits. She said the company should disclose its plans and provide a viable future for its German locations [4].
Sources: [1] Reuters, 12 November 2026 · [2] Automobil Produktion, 13 November 2026 · [3] ARD/Tagesschau, 12 November 2026 · [4] IG Metall, 13 November 2026.
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