Mercedes-Benz to halt 'all future investments' in Germany
ft.com
ft.com
Part of this is due to declining sales in China (driven by competitive domestic EVs there), and a large part is due to the political and regulatory envornoment in the EU/Germany: these automakers are being forced to electrify as ICE vehicles are banned as of 2035, cost of labor in Germany in 4-5x what it is in eastern europe[1], electricity and gas prices (for manufacturing) are through the roof, and VW itself is 20% controlled by the state and being hamstrung by that a bit as well.
[1]MB head of production: "The cost of one hour of labour in production in Germany is in some cases up to five times higher than at locations in Eastern Europe." VW cost of labor per vehicle: 4,850eur in Emden plant vs 1,078eur in Tianjin plant. Sources https://www.electrive.com/2026/11/13/mercedes-board-threaten... https://x.com/stats_feed/status/2109219150157471938
Is that really true ? I would say maybe 2x but 4-5x - where are wages that low in Europe anymore ?
There a line of thinking in Germany that the country worked hard to build itself up post-WW2 and it should now be able to enjoy the rewards. Unfortunately the rest of the world moved on, and all of Germany’s excellent and hard-won prosperity and rights make it less competitive globally.
>“The cost of one hour of labour in production in Germany is in some cases up to five times higher than at locations in Eastern Europe.” Pointing to the USA, he said even costs in this high-wage location are significantly lower than in Germany.
EVs were the future then and especially now. German car manufactures placed poor bets.
It's humorous when folks argue that China subsidized their core industries. Of course they do, that is their culture, and aligns with their target outcomes. This is why they are a leader in the vast majority of frontier technologies [1]. They are not going to tie their hands because wealthy developed nations demand they do for silly economic configurations.
"Great Allocators of Capital" are maybe not so great after all. Maybe they were just lucky until they weren't.
[1] https://news.ycombinator.com/item?id=45496507 (citations)
August 2024:
> Now covering 64 critical technologies and crucial fields spanning defence, space, energy, the environment, artificial intelligence (AI), biotechnology, robotics, cyber, computing, advanced materials and key quantum technology areas, the Tech Tracker’s dataset has been expanded and updated from five years of data (previously, 2018–2022) to 21 years of data (2003–2023).
> These new results reveal the stunning shift in research leadership over the past two decades towards large economies in the Indo-Pacific, led by China’s exceptional gains. The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five years (2019–2023) is leading in seven. China led in just three of 64 technologies in 2003–2007 but is now the lead country in 57 of 64 technologies in 2019–2023, increasing its lead from our rankings last year (2018–2022), where it was leading in 52 technologies.
Of course, one would hope the (US) government would use the time they bought their industry to try to catch up, rather than developing new V8 pickups.
If legacy US auto is not scaling EV production, why are the tariffs still in place?
https://ember-energy.org/data/ev-sales-tracker/
https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
While China has been scaling up it's production of vehicles, it'a also facing a 20% YoY decline in vehicle sales internally and thus has to look to export cars. It's currently shut out of the highly profitable and second largest (by volume, perhaps largest by $$) market and because of these factors and incoming EU action to prevent China from destroying the European auto industry faces companies who have built factories that were geared toward building 100,000s of thousands of vehicle but are only building a few thousand.
> If legacy US auto is not scaling EV production, why are the tariffs still in place?
Because your assumption is wrong. We don't need to scale EV production. Tariffs are in place because the engine and fuel source don't matter as much as having the industry does. While I also am in favor of competition, there's a balance to be had in maintaining good union jobs and preventing entire industries from collapsing due to all sorts of fair and unfair trade practices. It's the same approach the EU has broadly taken with its own products and market. The US is just playing catch up where it can or feels it needs to.
But if you think this is a big deal that needs to be solved (and I'm no opponent to saving the planet and reducing emissions or any of those things) my recommendation would first be to get China to release its hold on rare earth mineral processing, and then have them voluntarily give away EV and battery technology to other countries building cars so we can work on this problem together. Unfortunately China lost the trust of the western countries through its action and so we're sort of stuck in this situation because of them. None of the EU, Japan, Korea, or America are going to let their auto industry be destroyed and lose all of those good jobs just for the sake of the environment. It's a non-starter. If you think that's the approach to take you're probably wasting your time.
At this point, even if we could overcome the cultural resistance to deprioritizing cars, we really cannot do so. Hence the only realistic option seems to be optimizing cars to avoid emissions. Even if EV's just move the pollution somewhere else, on the whole they are way better than gas cars.
We make an impact not with a wholesale big dig style project but piece by piece. When that neighborhood grocery store opens in walking distance you can walk instead of drive. Maybe you still take your car to work everyday but we can still reduce emissions in other areas.
EVs just aren’t the answer to these problems, well, not at the expense of American workers, good union jobs, and our manufacturing capacity.
Also, to increase density the thing that people would need to give up, in addition to cars, is private backyards. I feel like that is a much bigger cultural hurdle to overcome, since that is like 50% (including the white picket fences!) of the home ownership part of the traditional American Dream.
We don’t need to give up private back yards. I live in an urban neighborhood and have one. Now some of the building I’ve suggested would be much higher density but not all of it needs to be. I think your reference points are a bit too extreme. I wouldn’t even talk about suburbs or New York in this, they don’t matter.
I drive an EV and I prefer it, but it’s just a non-starter to import Chinese EVs at the expense of union jobs and the American auto industry. Even if that means ongoing negative effects to the environment (overpopulation is another factor too for example).
Ember Energy: China’s EV exports hit record $9.2 billion in May as ASEAN demand surges - https://ember-energy.org/latest-updates/chinas-ev-exports-hi... - June 24th, 2026
- “China’s electric vehicle exports continue to break records, and the surge in shipments to ASEAN markets is especially striking,” said Euan Graham, a Senior Electricity and Data Analyst (Global) at Ember. “Southeast Asia is fast becoming one of the most dynamic destinations for electric vehicles, and China is supplying that demand at scale and speed.”
- Singapore, 24 June 2026 – China’s electric vehicle exports reached a record $9.2 billion, up 49% year-on-year, in May 2026, according to new data from global energy think tank Ember. The previous record was in April 2026 at $9.1 billion.
- In May 2026, China shipped a record value of electric vehicles abroad, exceeding the previous monthly high set in April and underscoring the country’s dominance in global EV manufacturing. China exported around 448,000 electric passenger cars in May, roughly 279,000 battery-electric vehicles and 169,000 plug-in hybrids. EV exports have closed in on lithium-ion batteries as the largest of the “new three” cleantech export categories, having grown from under $1 billion a month in 2020.
- Exports to Southeast Asia reached an all-time high of $1.2 billion in May 2026, as ASEAN nations accelerated the electrification of their vehicle fleets. The surge was led by Thailand, which took a record of more than 36,000 Chinese electric cars in May, and the Philippines, where shipments climbed above 33,000 vehicles.
https://ourworldindata.org/data-insights/global-sales-of-com...
- "To decarbonize road transport, the world must move away from petrol and diesel cars towards electric vehicles and other forms of low-carbon transport. This transition has already started. In fact, global sales of combustion engine cars are well past their peak and are now falling. As you can see in the chart, global sales peaked in 2017. This is calculated based on data from the International Energy Agency. Bloomberg New Energy Finance also estimated this peak occurred around that time. Sales of electric cars, on the other hand, are growing quickly. They more than doubled in the three years from 2022 to 2025." [My note: Rate of change! Doubling in 3 years, and it is very likely the time it takes before next doubling continues to decline.]
https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehic...
Certainly, there is a place for mass transit, biking (including e-bikes!), and walking where possible. In lots of places, it isn't possible, and so EVs will be sold to folks who want them. The faster we can impair combustion vehicles sales, the faster we get to 100% EV sales. If you want mobility, electric only.
The world’s 280 million electric bikes and mopeds are cutting demand for oil far more than electric cars - https://theconversation.com/the-worlds-280-million-electric-... - November 16th, 2023
280 million e-bikes are slashing oil demand far more than electric vehicles - https://arstechnica.com/cars/2023/11/280-million-e-bikes-are... - November 11th, 2026
(where are these ebikes built? China)
Yea it's fine that China builds electric bikes because that's not a manufacturing capacity that the west cares about. In the US and Canada at least we need better infrastructure so that more people are riding them, or manual bikes, or walking.
> Certainly, there is a place for mass transit, biking (including e-bikes!), and walking where possible. In lots of places, it isn't possible, and so EVs will be sold to folks who want them. The faster we can impair combustion vehicles sales, the faster we get to 100% EV sales. If you want mobility, electric only.
I also disagree that "in a lot of places it isn't possible". It is, actually. Most people live in urban areas and if we slightly adjust how we build and allow for proper levels of density then we don't even have to sell cars (which are a huge burden for the less wealthy).
There is no goal to get to 100% EV sales. If there is, I would support it as long as they're not Chinese. I'd rather buy another ICE vehicle than a Chinese EV because I care more about union jobs, American manufacturing capacity, and things like that than I do muddled visions of "if we just had EVs we would save the planet".
> Legacy auto and nation states can protect their domestic markets only for so long,
Well we can do it forever.
> and countries without any domestic auto manufacturing are going to consume all of the cheap EVs China will build for them.
Yea that's totally fine. The profitable customers though still remain in the west so if China wants to sell low priced EVs and follow the Android-ification strategy of gaining low-value market share I say more power to them. But we're not going to allow our jobs to go away and our industries to collapse. It's non-negotiable.
As your articles point out, China's increasing exports particularly to nearby countries which never had American markets to really begin with. I say that's a great thing for everyone. But you also have to acknowledge that the drive for Chinese exports is because of manufacturing overcapacity (this is a fact that can't be disputed) and because auto sales in China are falling (20% YoY) and their internal market is facing quite the challenge. But since we have auto industries we're not going to allow ours to collapse just to save Chinese jobs. It's nonsense.
He said, in the thread "Mercedes-Benz to halt 'all future investments' in Germany." and while VW has ~100k layoffs planned. You say "allow it" like it is a choice. You can play to win, or lose, and western automakers are not currently playing to win. Maybe this changes! But probably not. It's easy to change, accept a reduction in profits and invest in EV production. But you're not keeping historical profits and winning, as a legacy automaker, as long as Chinese automakers are willing to make ~5% margins on their vehicles.
https://news.ycombinator.com/item?id=50484586 ("This is on the heels of VW also pulling out of Germany (as of just two days ago). VW is scrapping their biggest plant in Dresden and also shifting manufacturing to Eastern Europe and out of Germany for four other plants. German automakers can not longer remain competitive, for a few reasons.")
Certainly looks like the jobs are going away and the industries are collapsing, based on a preponderance of the evidence.
Of course, the import of Chinese EVs would have an effect [2], and how the EU responds to that will be very interesting, but you're not looking at the broad picture and instead focusing on an ideological argument.
[1] https://apnews.com/article/cars-china-economy-europe-sales-d...
[2] Welcome to find another source but this one says Chinese EV penetration is less than 10% https://www.evchina.co/news/chinese-ev-sales-europe
[3] https://www.theguardian.com/business/2026/oct/25/volkswagen-...
Do you disagree with this? My entire thesis is data, evidence, and observation driven. Are you arguing someone will build faster? If so, who? Provide evidence. Are you arguing protectionist policies? Sure, but only a few countries have auto manufacturing to protect, the rest of the world does not. So, where's the disconnect?
Right... they are too busy selling state assets or allowing local corporations to be taken by private equity or sovereign wealth funds. Which then run them for the benefit of shareholders, or the new owner directly.
Western companies don't exist to provide what consumers want and give them a fair deal anymore. They exist to screw consumers just as much as they can, while taking as much money out for the upper management and paper owners.
This is why there is so much hand-wringing about "China". Chinese companies WANT to give consumers a good deal, they still have a point to prove in high end manufacturing, and obviously the Chinese government would like strong companies they control to project power.
But there is no sign of change to counter this in the West.
Western markets and enconomies have been fully abused by powerful players, they barely pretend to act in the interest of consumers anymore.
https://ember-energy.org/data/china-cleantech-exports-data-e...
> If you don't offer an electric car for under €20,000 by 2025, then I'm afraid you will fail in the market.
And that's what we're seeing now. Even with protective import tariffs, Chinese EVs can offer better quality and features at a lower price.
For decades, Siemens had excellent vertical relations with the German petrochemical, chemicals and materials industries who produced product ingredients that were world-beating on quality and price. The world caught up on quality and price to the point that BASF, Merck, Mayer etc were the inferior option when purchasing, destroying the competitiveness of everything downstream from them.
I don't know enough about Chinese automotive to say whether they've instead outcompeted MB on some other basis, but I do know for a fact that this one sector of the German miracle has gone away.
Not only was the Chinese part 75% cheaper, it also was higher quality.
We also have seen quite a few "domestic" manufacturers that are actually just slapping their label on Chinese made parts. Anyone whose attention snags on oddball stuff and gets things from China will know that distinct Chinese English font that only Chinese companies use. The source of the parts is pretty obvious when the QC stickers are in that font...
The new Porsche CEO definitely knows what he is doing, VW's core brand is also evolving well with the ID Polo, and even BMW has gotten something right with the Alpina acquisition and concept
Källenius on the other hand is responsible for the gigantic commercial flop that is the EQ series. He directed that before becoming CEO and then had to shut it down as CEO because people didn't see the cars as prestigious. And they are right. They look and feel like new Chinese brands. And don't even get me started on the new AMG GT. That is both a hideous and soulless car.
I once had the chance to do sit in an EQS (450somethingorotherdontreallyknow?).
The car had a sticker price of 156k€ (!!!), yet everything just felt _so_ cheap, was squeaky plastic - nothing in that car did warrant the price.
This is the general mindset in Germany, atleast amongst people who follow new car releases. The ID Polo in particular will be a smash hit, I'm sure.
Also, the culture here is extremely risk averse. Add the layers of bureaucracy and the inability to move with time, I expect more and more large companies will succumb to a similar fate.
Unsurprisingly, export manufacturing based economies are all facing the same decline.
As they lost their special know hows, the advantages are now in the hands of who invests more, diversifies more, has less bureaucracy and is more risk prone.
It feels that the political left doesn't want to see this, it seems that they're unable to see the forest through the trees. Lots of focus on specific topics, barely any holistic visions for the future of the country or the continent.
The political right is quick to blame the immigrants and while it's absolutely reasonable to have concerns about e.g the number immigrants receiving social welfare it's effectively a minor issue compared to the lack of economic growth or the absence of innovation.
Labor cost in the east is a fraction of Germany. A Chinese factory worker is gonna work 50h/week for under 20k/year, instead of 35h/w for more than twice that.
But of course it has to be the fact that they pay like 30 bucks less per MWh in China that makes it impossible to compete. German nuclear exit is most certainly the main factor here /s.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it"
Edit - the "cheap russian gas" story appears to be a myth:
https://adamtooze.substack.com/p/chartbook-150-why-cheap-rus...
https://www.forbes.com/sites/michaellynch/2022/06/30/germany...
The price is mainly driven by the most expensive power source required to fulfil demand. Nuclear was not the most expensive source, even though it's more expensive than renewables. Usually, gas peakers are the issue, and we could save a lot of money by replacing them with battery storage.
The last nuclear power plant was shut down in April 2023 and the next month, electricity became cheaper. In April 2024, it was much cheaper.
https://www.energy-charts.info/charts/price_average/chart.ht...
(PDF, summary on page 4) https://www.ise.fraunhofer.de/content/dam/ise/de/documents/p...
they've been rather successful for a long time on 35h/week (since 1995!)
so: this is not the issue and going to 40h/week will not solve it
https://www.dw.com/en/mercedes-benz-germany-investment/a-799...
Labour cost percentage 35.9% Indeed quite high.
https://group.mercedes-benz.com/documents/investors/reports/...
The CEO has been a disaster imho.
Took a brand that was "aspirational professional" and tried to make it ten years younger and sportier.
So it took itself from an empty niche, to the very same one occupied by Audi and BMW.
Wrong demographic with the wrong budget.
Reliability has gone downhill, while interiors look like a tacky vietnamese solarium appealing to gamers.
If you want to understand how clueless management is about cars just look at the SL model.
200k for a car that every person with that budget will skip to get a Porsche 911.
I see 911s everywhere, but SLs? They used to make sense at a different budget decades ago, now they are nonsense.
> Mercedes-Benz has decided to halt “all further investments” in Germany and warned that plant closures were now an option, marking an escalation of its stand-off with unions in a bid to reduce labour costs.
> The German premium carmaker has called for longer working hours without extra pay to boost productivity but has failed to reach a deal with its works council despite four months of negotiations.
> In an interview with board members published on the company’s intranet on Thursday, its production head Michael Schiebe said “the current cost structures do not allow us to invest in Germany”.
The article is short and sweet, so I’m wary of copying all of it. It goes on to explain:
* A 35-hour work week is the norm in Germany for automakers, and MB is asking their workforce to change to 40.
* Rising competition for cheaper Chinese automakers is placing new economic pressures on MB.
I hate that we live in a timeline where we keep asking more and more out of people.
We have one life to live.
Stop exploiting people.
Trying to get your manufacturing employees to show up more so you can make more money on the fixed costs (benefits, training, etc) is to put a baindaid on a bullet hole that is the modern big enterprise as it exists in the modern economy.
This is not the case. We have more leisure time and social safety nets than ever before.
In the simplest possible case, back in the 1950s, most households had one paid worker. Today, most households have two paid workers. The per worker number of hours remained flat, but the per adult number of hours worked skyrocketed.
Pre agricultural societies typically worked less.
Medieval peasants worked long days, but it was highly seasonal, and was limited by light. They worked ~1500 hours a year, and put another 5-800 hours into domestic work. Modern Americans will be very familiar with about 1800 hours of labor a year, plus 5-600 hours domestic labor. Plus significantly more errands and transit stacking on a few hundred hours a year. Most Americans push close to 2600 hours a year. But it can go much higher if you factor in childcare (largely kids in medieval times were put to work).
So, your claim of more leisure time is definitely incorrect.
We definitely have better leisure time. And our social safety nets are better (though declining as of late). Quality of life is higher for sure. I'm solely objecting to the claim we have more leisure time.
In 1950s, most households were in subsistence agriculture, where both spouses worked more or less around the clock. On in a couple wealthiest countries of the world, where minority of population lived, the situation was different.
It's not 8 hours of housework. Dishwashers, robovacs, laundry machines, and fridges all reduce the house labour load. I don't think people appreciate how much labour reduction has happened. Getting food for the day's meals was a daily thing, now you can go weeks, even months without having to get more food thanks to refrigeration.
Correct. It was a lot more.
If one country can have slaves, and you trade with them, then your country must also have slaves. Otherwise they price out your workers.
We already fought the war that this caused in America (Civil War). China is going to be in a war against slavery soon too.
There cannot be fair trade while one side uses slaves. It's pretty simple.
So if you root for workers, don't also root for China. Their standards for work aren't what you want your workers to compete with.
When Stalin died in 1953 Beria the Gulag chief has sent an official request to reduce the size of the workforce and cancel major projects because the work was inefficient, they spent more with forced labor than with normal workforce.
Adam Smith knew that, and there is additional work for example Acemoglu & Wolitzky (2009 / 2011) — The Economics of Labor Coercion
Only 6.4% of institutional and strategic investors are based in Germany. 34.5% are retail investors, and 20% of the German population owns any shares (of any company) at all. So most investors of Mercedes don't have any particular reason to invest in Germany.
Then Germany took the dumbfucktarded decision ever: they shut down all their nuclear power plants and they decided to become ultra-reliant on Russia.
In addition to that, the EU took another deeply fucktarded decision: they fucked up the timeline to "move to EV", by giving only 14 years (which is basically development cycles for only two generations of cars in Germany) to German manufacturers to move to 100% EV.
When european car manufacturers were nowhere when it came to EV cars.
So german (and french: and the number in France are terribly bad too) car manufacturers were forced not only to move to EV in a crazy hurry while their know-how was in ICE, but in addition to that due to closing nuclear plants and Russia beginning a war, energy prices rose like mad.
At some point energy price for car manufacturers was 7x higher than in China.
How do you want german car manufacturer to compete when both their own politicians and the EU as a whole teamed to destroy them?
That's what happened: instead of giving a reasonable timeline to move to EV (14 years was way too short and, btw, the EU did move the timeline a bit further now: but they realize too late they were wrong and did too little), the EU made sure energy price rose like mad.
The EU killed the french and german car industry. That's what happened.
Recently the CEO of Airbus explained in front of politicians that if France and the EU kept doing what it was doing, Airbus would suffer the same fate as the french car industry.
When ultra dumb decisions like this are taken, the consequences take some time to show up. First you need a full cycle of development for a new car, then you've got a company like, say, Porsche producing the shittiest Porsche ever, the Taycan, in a seven years development cycle. Then everybody realizes it's a piece of shit and customers want, from Porsche, a 911.
Then you've got even more dumbfucktarded decision: like the Porsche Macan ICE being the absolute best selling Porsche model. And Porsche decide to stop selling ICE Macan and start selling only 100% EV Macan. With batteries shittier than on Tesla or chinese cars.
And so Porsche's benefits, YOY, dropped... 93%.
Ninety-three percent revenu drop.
It's the same for all german car manufacturers: VW is in deep shit, Mercedes is in deep shit, Porsche is in deep deep shit.
And we have to thank the EU bureaucrats for that.
I'm not saying german car manufacturers had to keep selling ICE forever: I'm saying the EU should have made sure they had competitive energy prices for their factories and they should have been given more time for their switch to EV.
P.S: as a sidenote in France while workers at french car manufacturing companies were all concerned about their safety nets and social security and social rights etc., they didn't think that all that wouldn't matter as they'd find themselves completely out of their jobs instead due to the dumb decisions of EU bureaucrats (who seem to be in a hurry to destroy the EU as quickly as they can).
5 years of those 14 have now passed, and while it's true 5y ago they were nowhere to be found on the radar, they are still churning out cars like it's 1980 after 30% of the usable timeline is gone. The boards have no vision how to perform the switch to electric or how to play in an ultra-competitive market where it takes now 2 years from design to selling instead of the usual 10. Otherwise something would have been done by now, like securing some battery supply chain agreements, building fabs or ensuring to give people what they wanted (~500km range for a C segment car). Instead the ID.Polo starts at 23k with 330km range, and we'll still see about reliability, performance and software. Heck, Tesla Berlin took 3 years from breaking ground to mass production, and they still can't make something competitive with the Model 3.
I imagine nothing would have happened for another 10y if the timeline were longer. I believe the intent of the EU was to set a clear direction to follow and to push the industry to go for it, instead the dinosaurs keep finding excuses to protect the status quo and play by the old rules.
I agree with the points about cheap, clean and renewable energy that should have supported this.
Shutting down the nuclear plants before coal was stupid, but did not make Germany ultra-reliant on Russia. There were plenty of other sources of fossil fuels (Netherlands, Norway Middle East). Unlike gas/oil, Germany is still importing uranium directly from Russia btw.
>When european car manufacturers were nowhere when it came to EV cars.
The decision to phase out ICE in the EU was made in 2022, deliveries of the VW ID.3 started in 2020, and that wasn't the first European EV by a long shot. Sure the vast majority of Europe's car manufacturing was still geared for ICEs, but that statement is wildly inaccurate.
They want to reduce cost and the obvious way to do that, is to reduce the work force. That's not an easy thing to do in Germany, because unions and the worker's council are quite powerful.
That production is too expensive in Germany (and therefore halting investments), may be true or not, but stating it officially like in this announcement is mainly a method for forcing concessions from the worker's council.
https://chinamakershub.com/journal/china-manufacturing-costs...
If you compete on global markets, you inevitably compete with global wage levels, and somewhat comparable talent in China demands not even 50% of the wage it would get in Germany.
There is a reason that new car production has been shifting towards lower wage countries for decades now (US=>Mexico, Europe Central=>East).
This situation is gonna get better for countries like Germany once Chinese wage levels have somewhat caught up, but that might still take a while, and other big currently industrializing lower-wage countries might take over that role (like Indonesia or India).
At the same time, China is much better at EVs, and they're sold freely in Europe for less than the Euro carmakers can build them for.
It's a perfect storm. The carmakers are caught in the middle. They have to quickly and radically transform their product portfolio away from what they know, to something they don't know, AND they have to find a way to charge way less for it.
Thank you MB for reminding this to the world.
You kid but when you add up the amount of time a western BigCo worker spends in BS mandatory meetings and trainings and other BS that they don't care about, isn't productive and comes down from above in some misguided attempt to polish the statistics I bet the guy in China is actually spending a lot more time on task.
China is killing Germany's car production and has been for a while. It is now just much more obvious, even quality-wise, which used to be a stronghold foundation of german engineering. Expanding eastwards and cutting costs is a losing strategy for Germany - there is a reason why the AfD is gaining momentum, despite their addiction to ultra-right thoughts. Meanwhile, incompetent people such as Merz (old guy, talks big, acts little) fail hard when they meet reality. Guy is now sinking Germany quickly and he has no decency to want to step back and let more competent people at the least try to fix Germany. Meanwhile France is going closer towards bankruptcy. To some extent this is similar to the 1930s era, also aided by Trump cronies and the Putin mafia.
Germany but also the whole EU, needs to completely reconsider what it really wants; and how it plans to achieve that. The china dictatorship makes much more logical decisions - not in all areas, of course, but they pursue a strategy. Systematically. The EU does not really do that. They just claim they do but in reality they do not. Green energy is fine and dandy but if the prices keep on rising, inflation rises as well, then something does not work with that promise.
I can't help but think this was influenced somewhat by the shutdown of Germany's nuclear reactors thus making energy more expensive and all the knock on effects.
Citing high production costs, they are looking to the US and want to bring costs in Germany down to the production costs in the US.
Nothing about what cuts the management is willing to take.
Which is funny since both are much higher than China. These lagging car industries will only be able to be protected for so long from Chinese EVs like BYD.
How does one come to wonder if they are going to "slowly wind down the business"?
My bet (edit: reading other comments I'm glad I didn't put money on it... leaving this comment anyway) based on other cases of this is they are fighting a law (or several laws), and are making this threat as a "change the law to favor us or we will leave and this prove you need us more than we need you".
I don't know how it will work out for them, I've seen it go both ways. I've also seen this stop some really stupid laws, and also stop some really good laws. Without knowing details of what they are trying to do I can't comment on which side I support.
The shutdown had no effect on energy prices in Germany.
The other parts are:
1. German producers really fucked up with the "electric" revolution and were caught a bit with their pants down by Tesla and especially the Chinese brands.
2. Specific to Mercedes-Benz, I believe the brand failed to attract younger buyers. Personally, I associate Mercedes cars with boomers/older genX folks.
3. Price. In a moment in which affordability is a major issue for the majority of people, the base model of the cheapest car (the A class) starts from 42900 CHF.
While it is true that the work cost is higher than in Poland, even though Poland closed the gap immensely in the last 10 years, the issue is much more deeply rooted. There is no way Germany can now compete with China. This happened to the USA too, decades before, see how Detroit collapsed. China kind of copied the Japanese and South Korean variant while massively upsizing all of that, including integrating key aspects into their work flows. You only need to look at robot factories. You won't find that in Germany much at all. The innovation changed completely.
Mercedes-Benz just tries to shift the blame to lower costs, which is understandable from their point of view, but does not fix the core problem. Even building in Poland or Romania, won't fix the issue with regards to China. That's not the fault of the workers primarily.
Imported natural gas used to cost Germany roughly €12 per megawatt-hour (MWh) at the border
Now wholesale prices have climbed to around €60+ per MWh, roughly FIVE times higher than previous levels.
That's goodbye to Industry in Germany - well except for the War Industry which has state protection and funding and doesn't need to be competitive. And China has become even more cheaper since they pay far less for Russian gas.
I don't know why the very bright guys here on HN have such HARD blinkers on correlation and causation between energy prices and energy-intensive industry. Even Merz himself finally admitted it this year but most HN posters want to put their high-IQ heads into cement rather than admit that stopping Russian gas was one the main causes of the downfall of German industry.
Cars are mostly built by machines.
German automakers are simply shifting production to eastern Europe, where there are skilled autoworkers who will happily make cars for 4X less the cost of labor vs. German labor.
And a factory worker in China makes <$20k/year, and will be easily convinced to work longer than 35h/week.
Lower salaries are the easy solution to increase profits when the managers are incompetent.
You still need a bunch of wage-slaves to plan, build, maintain and operate the facilities, even if actual production is 100% automated. And nothing prevents your lower-wage competition from just copying the most efficient automation pieces, only there's less pressure on them to do so, and they stay more flexible with their cheap labor pool.
The thing that actually helps is wages in China rising to a somewhat competitive level, but that takes time.
Until we achieve worldwide socialism where it doesnt matter what is made where, this is how its going to be. National borders will dictate economics and what is best done in those countries. The wealthy west simply cannot compete on manufacturing anymore.
Have you looked at the prices of German cars? Nobody ever called them cheap. Germany exports mostly luxury vehicles, while paying their workers a pittance. As China car manufacturers move up the quality scale, they will eat up whatever marketshare German cars have.