Mercedes to cut bonuses and extend working hours

Officials said Mercedes-Benz will cut bonuses and extend working hours in Germany to secure €800 million in savings; the company said failing to meet the target could endanger two plants.

€800m savings, two plants at risk Officials said the measures are part of a cost plan aimed at preserving margin and production in Europe. The company reported the package would combine reduced one-off payments with longer scheduled hours, and that the shortfall in targeted savings is the trigger for potential plant closures.

Officials said the plan will be presented to works councils and employee representatives for approval. If councils reject the measures and the company misses the €800 million goal, officials said management may move to shut two facilities, a step that would lower capacity and create restructuring costs.

For equities, the mechanism is straightforward: a failure to secure savings would press Mercedes-Benz’s operating margin and could prompt investors to reprice the stock and suppliers exposed to production cuts. A successful deal would shore up near-term cash flow but widen labor negotiations across German auto suppliers.

Officials said the company aims to table formal proposals to works councils by October 15, 2026. Investors will watch council responses and any formal production decisions after that date.