Mercedes-Benz halts German investments as plant closures loom

By Ilona Wissenbach

FRANKFURT, Nov 12 (Reuters) - Premium automaker Mercedes-Benz MBGn.DE is halting all investments in Germany and considering plant closures to tackle the high cost of car manufacturing in the country, according to a memo to workers seen by Reuters on Thursday.

Management took the decision because it cannot agree with works council and union representatives on labour cost reductions, according to an interview with executive board members shared on the company's intranet.

Mercedes production chief Michael Schiebe said management had "jointly decided to halt all further investments in our German locations", citing high costs and the absence of an agreement over cost cuts.

Mercedes has for months been pushing workers to find cost savings. In September, Schiebe warned staff that two plants could close in Germany if there was no progress on the issue.

This appeared more likely in executives message on Thursday.

"We all want to avoid plant closures at all costs. Unfortunately, however, we must now explore this option in more detail," management board member Britta Seeger said in the memo.