Mercedes Delays Workers’ Allowance And Tightens Austerity

Mercedes-Benz has been forced to tighten austerity measures, and the latest measure is the postponement of an extraordinary payment to workers agreed by the collective agreement. That addition was scheduled for July.

The management informed the employees in a letter, which the DPA agency had access to. For now, it is not clear what the exact amount is, but it is usually 18.4 percent of the monthly salary.

In the letter, Mercedes indicated that the structural costs of production in Germany, especially labor costs, are no longer competitive in international comparisons.

At the same time, the management announced a discussion with the workers’ council on extending working hours without additional pay for the following weeks. According to the collective agreement, employees now work 35 hours a week.

The company ‘remains under tremendous pressure to reduce costs’, management said, as it must keep product prices within competitive limits.

“Despite all our efforts, the situation in Germany is dramatic,” she added, noting that each new bureaucratic request to factories in Germany worsens the relative price position of Mercedes cars.

The business result fell by 17.2 percent in the first quarter. Last year, revenue was halved compared to the previous year, from 10.4 to 5.3 billion euros.

At the same time, 2024 was already bad. The company’s operations are burdened by customs duties, currency movements and intense competition in the most important market, China. Because of all that, both turnover and profit are in constant decline.

Last year, Mercedes tried to respond to the difficulties with an austerity programme.

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