Mercedes has made an announcement that could spark significant backlash from labor unions in Germany, which were reportedly not consulted before the decisions were made.
The news comes amid reports of Volkswagen planning to cut more than 45,000 jobs on top of the 50,000 job cuts it previously announced.
Automakers appear to be struggling with tariffs, weak demand for electric vehicles, and intense competition from Chinese manufacturers.
According to a report by Automobilwoche, Mercedes is planning major changes to employee policies that could affect morale.
Longer Working Hours and Delayed Bonuses
Mercedes is considering extending working hours from a 35-hour work week to a 40-hour work week, according to the report. That means workers will have to work for an additional hour every day, assuming they work five days a week.
However, they will have to put in the extra hours without additional pay. That equals 260 extra hours of work a year with absolutely no additional pay.
If that wasn’t enough, Mercedes has reportedly decided to postpone a bonus payout, which was a “component of the collectively agreed salary.” It totals 18% of a worker’s monthly income.
The bonus was scheduled for payment in July, but workers were reportedly informed recently that the bonuses would be paid in 2027. Around 90,000 employees are said to have been impacted by this delay.
Mercedes reportedly took this major decision without consulting union officials, and that has upset them. Works Council Chairman Ergun Lümali said:
“This is not a convincing concept for the future.”
Lümali also criticized the idea that the company could enhance its competitiveness by having the workers put in the extra hours without additional pay.
Volkswagen Plans to Shut Four Plants and Lay Off 100,000 Workers
In other news about a German automaker planning major changes, Volkswagen is planning the largest restructuring ever seen in the history of the automotive industry.
According to a report by Reuters, Volkswagen is considering shutting four German factories and increasing the job cuts to 100,000 workers. The company’s supervisory board has been informed of the plans, which will be discussed on July 9.
Plant closures at Hanover, Zwickau, Emden, and Audi’s Neckarsulm site could lead to over 45,000 job losses. Combined with the 50,000 job cuts already planned, the total could reach 100,000 layoffs.
Earlier this week, Volkswagen CEO Oliver Blume shared the company’s cost-cutting plans with senior executives to build support before facing expected resistance from unions and the state of Lower Saxony, its second-largest shareholder.
Ingo Speich, a representative of Deka, an investment company that owns shares in Volkswagen, told Reuters that the root cause of the problem is dwindling sales. He said:
“The high costs are merely a symptom, not the cause. They do not address the root cause, which is weak sales.
“VW must bring attractive products to market that are in high demand; that would put an end to the debate over costs.”