Mercedes to halt German investments, mulling plant closures

FRANKFURT: Struggling German carmaker Mercedes-Benz announced Thursday it will halt all investment in Germany and is mulling plant closures, underlining the woes facing the country’s automotive sector.

Like its German peers, Mercedes has been battered by Chinese competition and high costs, and last month became the third big German carmaker to cut its outlook for the year.

Its management has been locked in talks with staff representatives to find ways to reduce costs but, with little sign negotiations were making progress, the manufacturer signalled a harder line.

“The executive board has jointly decided to halt all further investments in German sites,” said board member Michael Schiebe in an interview posted on the company’s intranet and sent to AFP.

Management was unable to see any way forward on finding a deal with unions “despite numerous intensive discussions,” he said.

“We are now forced to carefully examine which German sites we would have to close if we cannot achieve a change in the cost structure.”