Mercedes-Benz Tightens Cost-Cutting Course: IG Metall Calls for Protests at Multiple Locations

Postponement of the Special Payment

As emerges from a letter from the Mercedes board to employees in Germany, the company proposes that employees should in future work longer for the same money in order to cut costs. The letter states that one must "weiterhin mit Hochdruck die Kosten senken" in order to remain competitive on product prices. The board announced its intention to discuss with the works council in the coming weeks and months "how the future viability of Mercedes in Germany can be secured".

In addition, the board informed employees that the collectively agreed special payment expected in July is being postponed. According to IG Metall, this affects around 90,000 of the approximately 108,000 Mercedes-Benz employees in Germany. The special payment is to be moved to the following year. According to the union's website, the special payment can be postponed or suspended in economically difficult times.

Collectively Agreed Special Payment as a Bone of Contention

The special payment is the annual "Transformationsbaustein", which according to IG Metall amounts to 18.4 percent of the collectively agreed monthly individual income. This collectively agreed benefit was a central element of the most recent collective bargaining round in the metal and electrical industry. With the postponement, the company is interfering directly in the income situation of employees, the union criticizes.

In the board's words, the situation in Germany is "dramatisch" despite all efforts. The letter states: "Trotz all unserer Anstrengung ist die Situation heute in Deutschland dramatisch." The group leadership also pointed out that at Mercedes-Benz processes would be radically accelerated and grown structures slimmed down. One would "in allen Bereichen für das gleiche Geld mehr arbeiten", which from the board's perspective is "der direkteste und in unseren Augen fairste Weg". The working hour must become cheaper.

IG Metall Criticism of the Board Plans

IG Metall sharply criticizes the board's plans. "Aus Sicht der IG Metall richten sich diese Maßnahmen einseitig gegen die Beschäftigten und stellen zentrale tarifliche Errungenschaften infrage", the union stated. Among other things, the 35-hour week is to be defended. The union announced that the protests are intended as a prelude to further actions throughout the automotive industry.

According to IG Metall, thousands of Mercedes-Benz employees will take to the streets nationwide on the day of action. IG Metall chairwoman Christiane Benner is scheduled to appear in Düsseldorf, according to union information. The rallies are planned for this Friday at the Sindelfingen and Untertürkheim (Stuttgart) locations, according to the information.

Protest Actions at Multiple Locations

IG Metall referred in this context to the tense situation across the entire automotive industry. "In ganz Deutschland sorgten die Entscheider der Automobilhersteller und Zulieferer für schlechte Nachrichten", the union stated. "Aber eines vergessen sie: Die Beschäftigten sind nicht schuld an der Misere." IG Metall and the employees of manufacturers and suppliers would give the corporate leaders of the automotive industry "einen heißen Sommer und Herbst", "solange sie weiter auf Arbeitsplatzabbau und Verlagerung setzen, statt echte Problemlösungen zu suchen".

As the union further reported, 50,000 jobs at manufacturers and suppliers were lost in the industry last year. The union sees the workforces as the ones suffering in a politically and economically difficult phase. The protests are intended to send a signal against one-sided burdens on employees.

Company Response

A Mercedes-Benz spokesperson emphasized that it is important to the company to "Mitarbeiterinnen und Mitarbeiter frühzeitig und transparent zu informieren - auch bei schwierigen Entscheidungen". It "mögliche Unsicherheiten und Sorgen" would be "taken seriously". In addition, it respects the works council expressing its views on the productivity offensive. Talks would be held with the employee representation on how the future viability of Mercedes in Germany can be secured.

The background to the dispute is the company's economic development. As emerges from the current annual report, the Mercedes-Benz group profit in 2025 dropped significantly compared to the previous year, from 10.4 billion euros to 5.3 billion euros - a decline of nearly half. In the first quarter of the current year, group profit fell by 17.2 percent. Both sales and revenue of the company developed negatively.

Economic Situation at Mercedes-Benz

The company cited tariffs, negative currency effects and intense competition in China as having weighed on results. A little over a year ago, Mercedes-Benz had launched a cost-saving program called "Next Level Performance", described by the company itself as a performance-enhancement program. With the current letter, this course is being further tightened according to the company's account.

The works council had informed the Mercedes-Benz group management in advance about the planned protest actions. The union explicitly sees the protests as a prelude to further actions across the entire automotive industry. The development at Mercedes-Benz is, in IG Metall's assessment, exemplary of the tense situation in the industry, in which manufacturers and suppliers have for some time been suffering from declining demand, high cost pressure and intensified international competition.

With the rallies planned for Friday, the union wants to increase the pressure on the group leadership and at the same time make clear that employees are not willing to bear the consequences of the economic difficulties alone. The demand for defending the 35-hour week is a central point. The union signaled its readiness to escalate the conflict further beyond the current actions if necessary.

Meanwhile, the company side announced that it would enter into talks with the works council in the coming weeks on extending working hours without pay compensation. These talks are intended to secure the future viability of the company in Germany. From IG Metall's perspective, such plans endanger central collectively agreed achievements of employees and undermine the basis of the existing collective agreements. It therefore remains to be seen whether the negotiations between the board and the works council will lead to an amicable solution or whether the conflict will escalate further with the announced protests.