Mercedes-Benz Halts New Investment in German Plants, Weighs Closures

Mercedes-Benz has halted further investment in its German plants and is examining possible site closures as talks over labor costs continue, Reuters reported Thursday, citing a message to workers.

Production chief Michael Schiebe said management had decided to stop further investment at its German locations. The decision followed a failure to reach agreement with employee representatives on cost reductions, according to the report.

Management board member Britta Seeger said the company wanted to avoid closures but now had to examine that option in more detail. No specific plant closure was announced in the message reviewed by Reuters.

The dispute comes as German carmakers face high production costs, competition from Chinese manufacturers and changes in demand. Mercedes had warned in September that two German plants could be at risk if the cost talks failed to make progress.

Negotiations with the IG Metall union are continuing. The report does not establish that the investment halt is permanent or that a final closure decision has been made.