Mercedes-Benz Under Siege: Supply Chain Snags and Labor Strife Threaten Turnaround
Published on 07/05/2026 at 19:22 | Redaktion boerse-global.de
The German automaker is battling on two fronts. In Bremen, production of the flagship electric GLC has ground to a halt amid a shortage of high-voltage batteries and wiring harnesses, while across the country tens of thousands of workers are protesting management’s demand for longer hours without pay. The turbulence has left Mercedes-Benz shares trading near their 52-week lows, with the stock down 26.37% since the start of the year.
At the heart of the factory stoppage is a broken link in the supply chain. CATL, the Chinese battery maker, was forced to temporarily close its plant in Debrecen, Hungary, due to environmental compliance issues. To keep assembly lines moving, Mercedes is now shipping batteries from China — a detour that adds six weeks to delivery times. Separately, a Moroccan supplier of wiring harnesses was knocked offline by severe flooding. As a result, only about 3,300 electric GLCs had reached customers by the end of May, a fraction of the volume its rival BMW has achieved with the iX3. Market watchers have criticized the automaker’s lean-supplier strategy for leaving it vulnerable to such shocks.
While operations founder, the workforce is in open revolt. Over 33,000 employees took to the streets on Friday in nationwide protests led by the IG Metall union. The immediate flashpoint is management’s decision to defer a negotiated bonus payment for tens of thousands of workers until 2027. Adding fuel to the fire, Chief Executive Ola Källenius has called for scrapping the 35-hour workweek without any increase in pay. The union has scheduled a massive car rally in Stuttgart for July 9, and the risk of production losses at the home plant is mounting.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
The labor unrest is unfolding against a backdrop of deteriorating financial performance. First-quarter revenue slipped nearly 5% to €31.6 billion, while operating profit tumbled 16.8%. The car division’s margin now stands at just 4.1%, well below the company’s long-term targets. Källenius has blamed the downturn on a sales slump in China and the threat of new U.S. trade restrictions, and the cost-saving drive extends beyond Germany. On July 6, the company will cut 72 positions at its research center in California. A broader study shows that roughly 50,000 jobs evaporated in the German auto industry last year alone.
Even the performance-oriented AMG division is feeling the heat. The current C63 S E Performance relies on a four-cylinder hybrid powertrain, but core customers have rejected it, pining for the V8. AMG chief Michael Schiebe has admitted as much, and Mercedes is now planning to swap in a six-cylinder mild-hybrid for the upcoming C-class facelift next year.
Looking ahead, the stock faces additional headwinds beyond labor and logistics. India’s government is expected to issue new cybersecurity rules for vehicles with automated driving functions by October 2026, a regulation that directly affects top-end models like the S-Class. On the charts, the shares closed Friday at €45.40, still a fraction of their 52-week high near €62, and trade roughly 17% below the 200-day moving average. The immediate support level to watch is the year’s low at €42.64.
With a major protest already booked for early July and battery supplies unlikely to stabilize quickly, Mercedes-Benz is navigating one of its most challenging periods in recent memory. The question for investors is whether the company can resolve its internal and external crises before the damage deepens.
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