Mercedes-Benz has temporarily halted all new investments in its production facilities across Germany as negotiations with labor unions over deep cost cuts remain blocked, according to German media reports citing internal company information and the DPA news agency, as reported by segabg.com.
Management argues that current labor costs are uncompetitive, noting that a single working hour in German plants costs up to five times more than in the company’s Eastern European bases. The deadlock follows months of friction between executives in Stuttgart and the powerful industrial union IG Metall over a plan presented in the summer to slash labor costs in Germany by approximately 800 million euros annually.
“In the management board, we made a joint decision to temporarily halt all further investments in the German locations.”
Concurrently, human resources director Britta Seeger warned that without negotiating progress, the company must conduct a detailed review of which German plants it can afford to maintain, according to segabg.com. The automaker is pushing for a shift from a 35-hour to a 40-hour work week without pay increases—termed a productivity offensive—while IG Metall counters with demands for a 5% wage hike and long-term employment guarantees.
Volkswagen has abandoned its Gamechanger production concept for the main plant in Wolfsburg, Reuters reported via auto-press.net, amid wider plans under CEO Oliver Blume to cut 100,000 jobs and close up to four German factories to counter Asian competition. Volkswagen reported an operating loss of 5.8 billion euros in the third quarter.
Bosch is cutting 750 jobs in Germany by the end of 2029, following previous announcements of 670 layoffs at its engineering center in Sofia, Bulgaria, and 510 job cuts in Timișoara, Romania, according to dbr.bg.
Meanwhile, supplier Schaeffler announced on November 3 that it would cut 3,460 jobs across Europe—with about three-quarters of those reductions concentrated in Germany—and close four German plants and one Belgian facility, as reported by carmarket.bg. Chief Executive Officer Klaus Rosenfeld said that personnel costs in Germany are significantly higher, requiring structural corrections to maintain competitiveness.
Management cited uncompetitive labor costs—where an hour of work in Germany costs up to five times more than in Eastern Europe—and deadlocked negotiations with IG Metall over a plan to cut labor expenses by 800 million euros annually, according to segabg.com.
Executives are pushing for a transition from the standard 35-hour work week to a 40-hour work week without increasing total compensation, a measure union officials have rejected, according to segabg.com.
Schaeffler is cutting 3,460 jobs across Europe, with approximately 2,660 of those position reductions occurring in Germany, according to carmarket.bg.
Volkswagen reported a growing operating loss of 5.8 billion euros during the third quarter, bringing its operating profit for the first nine months of the year to 0.1 billion euros, according to auto-press.net.