Mercedes-Benz halts all further investment at German facilities

Mercedes-Benz has long been a symbol for the German auto industryImage: Bernd Weißbrod/dpa/picture allianceAdvertisementMercedes-Benz announced on Thursday that it was halting all further investment at its German sites for the time being.

"The executive board has jointly decided to halt all further investments in German sites," Mercedes board member Michael Schiebe said in a memo on the company's intranet that was seen by the AFP news agency.

The company is also weighing plant closures, the memo added.

The announcement comes as the luxury German automaker faces increasing pressure from the works council and the IG Metall trade union.

Mercedes-Benz is "forced to examine, in concrete and detailed terms, which sites in Germany we can still afford to maintain," board of management member Britta Seeger said in an interview published on the company's intranet.

"We all want to avoid plant closures at all costs," she added. "Unfortunately, however, we must now pursue this option in more concrete terms."

Shiebe, the company's chief production officer, said the current cost structures meant it is not possible to invest in Germany.

German labour costs are sometimes five times higher than at plants in Eastern Europe, where administrative costs are also similarly much cheaper.

Schiebe had recently announced that two plants in Germany would have to close unless costs were reduced.