From Energ yNews Beat, September 24:
Mercedes-Benz is no longer talking about “transformation.” It is talking about survival in Germany.
WirtschaftsWoche, citing three people familiar with the talks, reports that Mercedes wants about €800 million in German labor-cost savings — roughly $911 million at current rates. Options on the table include longer hours without extra pay, cuts to holiday and Christmas bonuses, and the elimination of special payments. Management has already told workers that producing in Germany has become too expensive. If the targets are not met, two German plants — one assembly site and one powertrain site — could close. Mercedes declined to comment on the talks.
This is not an isolated labor spat. It is what a high-cost energy system plus a forced EV transition plus a flood of cheaper Chinese vehicles looks like when it finally hits a luxury brand that used to set the terms of the market.
Germany Became Too Expensive — On Purpose
Production chief Michael Schiebe told a works meeting in Sindelfingen that German production is not competitive by international standards, especially on labor. The company still says it wants to keep German sites and jobs. The condition is higher productivity and a lower cost per hour. The works council’s answer has been blunt: not on these terms.The wage gap is real. Eurostat-linked reporting puts German industrial labor costs around €49.50 an hour versus €15.60 in Hungary. Mercedes has already doubled annual capacity at Kecskemét, Hungary, to about 400,000 vehicles, making it the company’s largest European plant. Factor costs there have been cited at roughly 70 percent below German levels. The company has also said it wants the share of production in lower-cost countries to rise from 15 percent in 2024 toward 30 percent by 2027.
Labor is the visible fight. Energy is the structural one.
IEA data for 2025 show EU electricity prices for energy-intensive industry still averaging more than twice U.S. levels and nearly 50 percent above China. That gap did not close after the 2022 spike. It became the new baseline. German energy-intensive output — chemicals, metals, glass, paper, ceramics — fell 15.2 percent from February 2022 to March 2026. Total industry fell 9.5 percent. Those sectors lost about 53,200 jobs.
That is the industrial base that supplies steel, chemicals, glass, electronics, and precision parts to car plants. When those plants shrink, auto assembly does not stay an island of prosperity. Volkswagen is in a historic overhaul. BMW is cutting thousands of jobs. Mercedes is now asking German workers to work more for the same money so two plants do not disappear. The pattern is the same: high power prices, carbon costs, grid charges, and a regulatory timetable that assumed Europe could price carbon first and still keep the factories.
Chinese EVs Did Not Wait for Europe to Finish Its Transition
While German plants argue over Christmas bonuses, Chinese brands have rewritten the European showroom....
....MUCH MORE
What Mutti hath wrought. Second worst German Chancellor ever.
