German Auto Giants Push Unpaid Overtime and Offshore Moves as Profits Tumble
28.06.2026 - 20:23:52 | boerse-global.de
Germany's three largest carmakers are heading for a bruising autumn. Mercedes-Benz, Volkswagen and BMW have each announced cost-cutting plans that include unpaid extra hours, job reductions and shifts of production abroad, as profits slide and sales in key markets weaken. Worker representatives have reacted with fierce criticism, setting the stage for tense negotiations later this year.
Mercedes-Benz is tightening its belt hard. Management is asking employees to work a 35-hour week without additional pay, effectively unpaid overtime. A bonus component called the "Transformationsbaustein" – equivalent to 18.4% of a monthly salary – would be deferred to 2027. For managers, zero pay increases are planned. At the same time, the Stuttgart-based company intends to move parts of its manufacturing and administration to other countries.
“We must examine every single expense,” said Personalchefin Seeger, stressing the need for a productivity offensive. The works council accuses the board of unilateral decision-making and has promised to fight the proposals. The current collective agreement runs until autumn 2026, when new tariff negotiations are due – likely to be a showdown.
The financial pressure explains the urgency. Mercedes-Benz posted a 57% drop in operating profit for 2025, to €5.82 billion. In the first quarter of 2026, its sales in China – a crucial market – fell 27%.
Volkswagen’s situation is no less severe. The “Zielbild 2030” programme targets the elimination of up to 100,000 jobs worldwide. The plants in Hannover, Zwickau, Emden and Neckarsulm are expected to be hit hardest. Deputy works council chair Jürgen Mahnkopf described the move as a breach of trust with the workforce.
The group’s profit sank 44% to €6.9 billion last year. The supervisory board is scheduled to meet on 9 July 2026 to discuss strategy.
BMW has joined the wave of austerity, slashing its margin forecast to between 1% and 3%. Worldwide, the Munich-based manufacturer plans to cut 5% of its positions – roughly 7,700 jobs.
Despite a slight recovery of the overall EU car market in May – up 3.6% – weak prior-year results and the cost of electrification continue to weigh heavily on German producers. Unions and politicians alike are calling for emergency support programmes, but the companies insist that deeper cuts are unavoidable.
As autumn approaches, the clash between management demands for cost savings and worker resistance over jobs and pay is set to become the industry’s defining battle.
