40 Hours Without Extra Pay or Move to Eastern Europe: Mercedes May Close One of Its German Plants

Mercedes-Benz Group management is considering closing one of its key assembly plants in Germany if worker representatives refuse to accept drastic cost-cutting measures. German business weekly WirtschaftsWoche reported this, citing negotiation participants. The supervisory board has not yet approved a final decision, but the emergence of such a threat following the crisis at Volkswagen points to the deepening recession in the German auto industry.

Dispute Over 40 Hours and Elimination of Bonuses

The main point of contention is management’s demand to shift workers from the usual 35-hour to a 40-hour workweek without any financial compensation. Additionally, management insists on revising social benefits: cutting Christmas bonuses, vacation pay, and employees’ share of the company’s annual profits. The board has already frozen one of the installments stipulated by the collective agreement.

If unions do not agree to concessions, the company is considering shifting investments to build a new plant in Eastern Europe. In that case, one of the existing assembly sites in Germany would become redundant and be shut down, inevitably leading to a wave of layoffs at component plants in Hamburg and Untertürkheim.

Headquarters in Stuttgart declined to comment on the closed-door meetings. Notably, in its 2025 strategy, Mercedes publicly assured that its domestic production sites were untouchable, so the emergence of scenarios involving plant closures indicates a sharp hardening of rhetoric.

Hungarian Argument and Union Position

Management’s main bargaining chip is the site in Kecskemét, Hungary. The plant’s area has been more than doubled, bringing its planned capacity to 400,000 cars per year. In a Mercedes-Benz Media release, the company emphasized that total production costs—including wages, energy tariffs, logistics, and taxes—are about 70% lower in Hungary than at plants within Germany.

Kecskemét already assembles the electric C-Class, and the company plans to move production of the compact G-Class and part of the GLC crossover volumes there, taking over workload from German assembly lines.

The workforce has no intention of giving in: over 33,000 employees of the brand took part in protests organized by the IG Metall union. Union leaders categorically refuse to finance the corporate transformation with unpaid labor and call the threats of plant closures blackmail. The outcome of the standoff will be determined by the next round of negotiations of the tariff commission.