Mercedes-Benz is pointing to an 81.7 percent per-hour labor cost advantage at its Romanian factory in Cugir compared to German plants, according to internal company presentations reported by Merkur.de. The stark cost comparison comes as the automaker demands longer working hours from German employees to address dropping profit margins and stiff sales declines in key global markets.
Internal Cost Disparities Highlight Eastern European Expansion
Internal corporate figures reveal massive cost discrepancies across the automaker’s European footprint. According to documents cited by Merkur.de, hourly labor costs at the Cugir facility in Romania sit 81.7 percent lower than comparable German operations. Similar internal metrics show a 75 percent cost advantage in Hungary and a 76.5 percent advantage in Poland.
These figures reflect internal group comparisons rather than independent national studies. Management is leveraging the data to argue that German production units are too expensive relative to their productivity output. Despite these pressures, the company has stated an intention to maintain its German factories and workforce, provided it can secure necessary improvements in cost efficiency and productivity.
Labor Union Clashes Over Demanded Unpaid Hours
The cost debate has triggered direct conflict between leadership and labor representatives in Germany. Investigations by the Frankfurter Allgemeine Zeitung (F.A.Z.) indicate that Mercedes is demanding an increase in the weekly working schedule from 35 to 40 hours without a corresponding salary increase.
Management reportedly warned that if the works council and the IG Metall union reject the demand, plant closures in Germany paired with expanded production capacity in Eastern Europe remain possible scenarios, though F.A.Z. notes no specific plant closure decision has been finalized yet. German employees currently retain job security guarantees through 2035.
“Five hours of unpaid overtime would mean a total wage cut of 20 percent,” a spokesperson for the IG Metall union told F.A.Z., explaining the union’s outright rejection of the proposal.
Did you know? Mercedes is investing roughly one billion euros to expand its manufacturing footprint in Kecskemét, Hungary, growing the facility from roughly two to millions of square meters to handle production of the new electric C-Class.
Declining Chinese Sales and Productivity Pressures
The labor dispute unfolds against a backdrop of tightening financial results. According to the official second-quarter financial report released by Mercedes on July 28, 2026, total group turnover reached billions of euros. However, adjusted operating profit within the Mercedes-Benz Cars division fell to millions of euros.
Adding to operational headwinds, sales in China dropped by 30 percent during the period. In response, leadership has ramped up its productivity growth strategy with a primary focus on domestic German facilities.
Meanwhile, regional manufacturing investments continue to shift. Following an injection of substantial capital into the industrial hub in Alba County, Romania, the local facility will manufacture the propulsion units destined for the upcoming electric Mercedes-Benz GLC model.
Frequently Asked Questions
What is the labor cost difference between Germany and Romania at Mercedes?
Internal company presentations cited by Merkur.de indicate an 81.7 percent per-hour labor cost advantage at the Cugir factory in Romania compared to German locations.
Why is Mercedes asking German employees for more hours?
According to F.A.Z. reporting, the automaker is seeking to extend weekly working hours from 35 to 40 without pay increases to counter high domestic costs, shrinking automotive profit margins, and a 30 percent sales drop in China.
What do labor unions say about the proposed hours extension?
The IG Metall union firmly rejects the five additional hours, stating that the move equates to a 20 percent wage reduction for workers.
Are German jobs currently secure?
German employees hold job security guarantees running through 2035, and F.A.Z. reports that management has not yet made a final decision regarding specific plant closures.
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