Mercedes-Benz Cuts Models and Reopens Buyouts as German Plants Hang in the Balance
Published on 10/02/2026 at 12:41 | Editorial boerse-global.de
Mercedes-Benz is pressing ahead with a twin retrenchment — thinning its model lineup while reopening a voluntary severance scheme — even as its production chief publicly raises the specter of plant closures at home.
On 22 September, production head Michael Schiebe warned the workforce that a German assembly plant and a German powertrain facility could be shut if costs do not come down. No specific sites were named. The company said manufacturing in Germany is not internationally competitive, above all because of high labor costs, while reaffirming its intent to keep domestic sites and jobs provided that productivity-boosting conditions are put in place.
An €800 Million Target on German Payrolls
Behind the warnings sits heavy savings pressure. According to a WirtschaftsWoche report, Mercedes-Benz aims to strip roughly EUR 800 million from German labor costs. Longer weekly working hours without extra pay, along with changes to — or the outright elimination of — special payments, are on the table. Mercedes declined to comment on the ongoing talks, Reuters reported.
The buyout program adds a second lever. Management plans to relaunch a voluntary severance scheme in December 2026, aimed at staff in administration, finance and development. For the first time, executives will be eligible too. The company has not set a target headcount for departures, and the program depends strictly on mutual agreement between employer and employee. Between April 2025 and March 2026, some 5,500 employees already left through a similar voluntary scheme.
Model Range Trimmed for 2027
Alongside the payroll measures, the carmaker is pruning its vehicle range for model year 2027. Pure-electric models including the EQE sedan and the sporty AMG EQE are being dropped. Top-end offerings such as the AMG S63 E Performance and the luxury SUV Mercedes-Maybach EQS680 also fall away. Volume and price leaders like the EQS sedan and EQS SUV stay in the lineup, concentrating resources on higher-margin segments. Whether sporty variants such as the AMG C43 and C63 sedans survive remains unconfirmed.
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Washington Talks and an Autonomous Driving Bet
Abroad, regulatory uncertainty adds to the operational to-do list. On Tuesday, US Senator Bernie Moreno commented on draft legislation dealing with Chinese stakes in automakers, saying the ongoing talks are meant to ensure Mercedes-Benz stays exempt from a ban on selling vehicles in the United States. Resolving that question carries considerable weight for the premium maker's sales prospects.
To stay in the race for future key technologies, the group is leaning on partnerships in automated driving. The launch of that system is slated within the next two years.
Earnings Halved, China in Freefall
The pressure shows in the numbers. In fiscal 2025, Mercedes-Benz earned EUR 5.3 billion, down from EUR 10.4 billion a year earlier — a near halving within twelve months. The first quarter of 2026 brought no relief, with profit falling another 17.2 percent. The key culprit is the most important single market: in China, passenger car sales collapsed 30 percent in the second quarter of 2026. Worldwide, deliveries slipped 6 percent over the same period to 511,900 vehicles. Cost cuts now have to offset that shortfall.
Optimists see the cutbacks as the precondition for a margin recovery. A slimmer model range lowers complexity across the group, trimming development and production outlays, while the first-ever extension of buyouts to management ranks promises extra leverage on personnel costs. If fixed costs can be brought down for good, the earnings power of the remaining sales would strengthen noticeably.
Risks Cut Both Ways
The dangers, though, are substantial. The slump in China shows how badly demand for established premium cars is suffering there; should the downtrend entrench itself, pure cost-cutting will quickly hit its limits. The severance scheme's reliance on mutual consent, with no stated target, leaves the outcome uncertain. And thinning the portfolio carries volume risk — if the brand loses customers at the broad end, lost revenue could eat up the savings achieved.
Chart Levels Set the Terms
For investors, clear markers are emerging. As long as support at the 52-week low of EUR 39.77 holds, there is room for the stock to bottom out. A sustained daily close below that level, however, would threaten to accelerate the broader downtrend. The shares last changed hands at EUR 40.31, down 33 percent since the start of the year and barely above that low. In pre-market trading the stock stood at EUR 40.20, just 1.1 percent above the 52-week trough.
The next concrete catalyst is the planned December 2026 start of the buyout program, when take-up among the workforce and the near-term cost of severance payments will become visible. Until then, sales signals from the Far East and the progress of the portfolio overhaul are likely to set the tempo.
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