German automotive group Mercedes-Benz has decided to suspend further investment in its production facilities in Germany and has begun a detailed analysis of the possibility of closing certain plants due to high production costs and the lack of agreements with trade unions on reducing them, Reuters reported on November 12, citing an internal message from the company’s management to employees.
The management board’s decision was made after several months of unsuccessful negotiations with the works council and the IG Metall trade union on increasing labor productivity and reducing personnel costs.
Michael Schiebe, the Mercedes-Benz management board member responsible for production, said that management had jointly decided to halt all further investments in German facilities until agreements on cost reductions are reached.
According to him, the cost of one working hour at some of the group’s plants in Germany can be five times higher than at production facilities in Eastern European countries.
Mercedes-Benz management warned that, in the absence of agreements to improve competitiveness, production of new car models could be located exclusively outside Germany.
Britta Seeger, a member of the company’s management board, noted that the group seeks to avoid plant closures but, due to the lack of progress in negotiations, is forced to examine this possibility in greater detail.
Schiebe had previously warned that if the current level of costs persists, two German facilities, including an assembly plant and a powertrain production facility, could face closure.
The specific facilities that could be closed have not yet been named, and no final decisions have been made regarding the termination of their operations.
Mercedes-Benz has around 12 production facilities in Germany. Its main passenger car assembly plants are located in Sindelfingen, Rastatt, and Bremen, while engine and component production is concentrated in Stuttgart and other cities. The main point of disagreement between management and employees remains working hours and the wage structure. The group proposes increasing the working week from 35 to 40 hours without a corresponding increase in wages, as well as revising the system of bonuses, additional payments, and compensation.
The IG Metall trade union opposes the deterioration of working conditions and is demanding a 5% wage increase as part of the current industry-wide negotiations.
According to Handelsblatt, Mercedes-Benz management expects to save approximately EUR 800 million annually by reducing personnel costs.
Negotiations on cost reductions are taking place against the backdrop of deteriorating financial performance in Mercedes-Benz’s passenger car business.
According to the group’s financial statements published on October 28, sales of Mercedes-Benz Cars vehicles in the third quarter of 2026 declined by 7.8% compared with the same period of the previous year, to 407,200 units.
The division’s revenue fell by 5.8% to EUR 22.37 billion, while adjusted operating profit (EBIT) dropped by 50.8% to EUR 560 million, compared with EUR 1.14 billion a year earlier.
The adjusted return on sales decreased from 4.8% to 2.5%.
At the same time, the financial results of Mercedes-Benz Group as a whole were better thanks to the performance of its commercial vehicle and financial services divisions.
The group’s total operating profit in the third quarter amounted to EUR 1.77 billion, compared with EUR 750 million a year earlier, while net profit increased to EUR 1.52 billion.
During the first nine months of 2026, investments in fixed assets and research and development expenditures at the Mercedes-Benz Cars division decreased by a combined 11%.
The company also announced the resumption, starting in December 2026, of a voluntary redundancy program for employees of administrative and other indirect departments in Germany.
Mercedes-Benz explains the need for restructuring by intensifying competition from Chinese automakers, declining demand in certain markets, high production costs, and the impact of tariff restrictions.
The difficult situation at Mercedes-Benz is unfolding against the backdrop of restructuring at other major automotive groups and component manufacturers in Germany.
In particular, German automotive components manufacturer Schaeffler announced on November 3 plans to cut 3,460 jobs in Europe, including approximately 2,660 in Germany, and close five production facilities, four of which are located in Germany.
The company expects the restructuring to improve its annual financial result by approximately EUR 300 million starting in 2030.
Meanwhile, Volkswagen is implementing a cost-reduction and production restructuring program in response to intensifying international competition.
According to a study by consulting firm Roland Berger published on October 7, 2026, the German automotive industry could lose at least 200,000 jobs by 2030.
Analysts estimate that employment in the industry, including carmakers and component manufacturers, could fall from approximately 692,000 people in 2025 to 490,000 in 2030.
The researchers note that the average capacity utilization rate of German automotive plants in 2025 was around 60%, whereas profitable operations usually require a rate of at least 75–80%.
Mercedes-Benz Group AG is one of the world’s largest manufacturers of premium-segment automobiles, headquartered in Stuttgart. The group includes the Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Financial Services divisions. The company produces passenger cars, electric vehicles, and light commercial vehicles, and also provides financial and leasing services.
Germany is losing industrial jobs at an accelerated rate – and this is no longer a localized slump, but a steady trend. According to a fresh study by EY, the industry cut employment by 2.1% over the year, with the auto industry losing about 51,500 jobs (-6.7% year-on-year). Weak demand, expensive energy, competition from Asia, US duties and the expensive transition to electric vehicles are squeezing margins and forcing concerns to optimize staffing levels. In Q2 2025, industry revenue fell 2.1% YoY to €533bn, continuing a series of quarterly declines.
Structurally, the auto sector was the hardest hit, but contractions are also evident in mechanical engineering and metals, while chemicals and pharma are showing relative stability, as evidenced by both public excerpts from the EY barometer and industry commentary in the German business press. In aggregate, German industry has shed around a quarter of a million jobs since 2019, reflecting the cumulative effect of several consecutive shocks.
Operational metrics point to a sluggish cycle, with new orders in manufacturing falling in June and annualized turnover declining; this combination usually signifies weakness over the horizon of the coming quarters, even if individual months produce technical bounces in production. At the macro level, this is combined with a fall in GDP in Q2 and a downward revision of the dynamics of the beginning of the year.
The political backdrop has become tougher, with Chancellor Friedrich Merz openly stating that the current welfare state model is “unfundable” without reforms, signaling a possible shift in budget priorities in favor of incentives for employment and industrial competitiveness. For business, this means less room for “inertia” subsidies and more pressure on productivity, R&D and export adaptation.
What this means for companies and the labor market. Automakers and their supply chain will likely face a second wave of restructuring to accommodate the EV economy and US tariff geopolitics; engineering will continue to lose low-margin positions to Asian competitors, and growth will shift to high-engineering value-added niches. For chemicals and pharma, the window of resilience is preserved through contractual models and pricing power, but energy-intensive segments remain vulnerable to spot gas and electricity disruptions. The labor market will be “two-speed”: release on the assembly line and in basic metalworking in parallel with a shortage of specialists in automation, electronics, software, battery technologies and chemical technologies – this is already evident in the structure of vacancies and industry surveys.
Conclusion. The job cuts are not the “end of industry” but a painful realignment: Germany is losing mass jobs where it is losing out on costs and is trying to retain and grow employment in capital- and knowledge-intensive segments. The key to a turnaround is cheaper energy, faster permitting procedures, prioritization of industrial investments and retraining for the electric and digital agenda. In the meantime, order and turnover statistics signal that the bottom of the cycle has not yet been passed.
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Registrations in Ukraine of new and used electric vehicles in 2021 increased by 18.9% compared to 2020 – up to 8,541 units, while registrations of new cars accounted for 14.2% versus 8.9% a year earlier, the Federation of the Automotive Industry of Ukraine (FAU) reported. “The year ended positively. In December, the number of registrations per month exceeded 900 for the first time, amounting to 928 electric vehicles – twice as many as a year ago, and 8% more than in November,” the report says.
At the same time, the three market leaders remained unchanged – Nissan, Tesla, Chevrolet, which together hold 55% of the market.
According to the above statistics, the leader of registrations Nissan (market share 26.1%) last year showed a slight increase (by 1%, or 26 cars) – up to 2,227 units (for 11 months showed a fall of 1%).
At the same time, Tesla registrations (19.6% of the market) decreased by 16% – to 1,670 units, and Chevrolet (with a 9.4% market share) increased sales by 54% – to 802 units.
“It is interesting that almost all brands have increased sales – except Tesla and Kia. In particular, Audi doubled sales, which allowed it to break into the top ten to the 7th place,” the report says.
In the ranking of brands, after the top three, there are Renault (an increase of 76%, to 551 units), Volkswagen (by 80%, to 550 units), Hyundai (by 43%, to 363 units), Audi (up to 334 units), Mercedes-Benz (up 28%, to 236 units) and Kia (down 13%, to 154 units).
Fiat failed to stay in the top ten, which in 2020 took fourth place, and in 2021 – 12th.
