GermanyMercedes-Benz has warned employees that German production is no longer cost-competitive and that two plants in the country could close if that does not change. Production chief Michael Schiebe said the company’s goal is to keep every German site, but that “if we are unable to do this, we will have to close one German assembly plant and one German powertrain plant,” according to Carscoops’ account of his remarks. Reuters reported the warning on 22 September.
What was said, and what was not
This is a conditional warning, not a closure decision. Mercedes has not said which plants it means, and has not set a timetable. Mercedes runs three vehicle assembly sites and seven powertrain plants in Germany.
The company’s stated problem is cost, above all the price of labour in Germany. Any savings would have to be agreed with the IG Metall union, which rejected the threat: a spokesperson said that “threatening plant closures is no way to shape the future” and that the answer to such ultimatums is “not on our watch”, as reported by Carscoops.
Where the work is going instead
Mercedes is putting capacity abroad. In July it confirmed a 1 billion euro expansion of its plant in Kecskemet, Hungary, which will become its largest factory in Europe. Kecskemet builds the new electric C-Class, and the compact G-Class is planned for the same site.
Mercedes is also under pressure from several directions at once. Chinese brands such as BYD and Geely are undercutting European prices, US tariffs cost the company about $1.1 billion in 2025 according to Carscoops, and Mercedes is cutting costs across the business. Volkswagen is weighing German plant closures of its own.
