Mercedes-Benz AG has suspended new investment commitments at its German production sites and is reviewing which factories it can afford to keep. Production chief Michael Schiebe told Handelsblatt that future models could be produced entirely abroad if German production costs remain too high.
The board jointly decided to stop committing further capital to German locations after months of unsuccessful negotiations over productivity, labor costs and working hours.
Labor director Britta Seeger said management is assessing which plants are economically viable. No site has been named for closure and the company has not announced a shutdown timetable, though Seeger acknowledged closures remain possible.
Mercedes says it seeks increased working hours from German employees without additional pay to lower the cost per labor hour; Germany's largest industrial union, IG Metall, opposes those concessions.
Negotiations have stalled and management is examining where cost structures render continued production in Germany unaffordable. Moving production abroad would carry substantial costs for factory preparation, workforce training and long lead times.
Employees are focused on whether individual plants will survive after current products reach the end of their generation lifecycles. Schiebe warned employees in September 2026 that a couple of German facilities could face closures if meaningful cost savings are not achieved; he did not identify specific sites, though reports suggest a vehicle assembly plant and a powertrain facility.
Mercedes-Benz AG lowered its full-year 2026 margin forecast for the passenger car division to 2 to 3 percent, down from a previous expectation of 3 to 5 percent, citing weak conditions in the Chinese market and higher raw material costs.
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