Diverging Paths in Automotive Industry: Mercedes Cuts German Jobs While Expanding in Hungary; Tesla Grows Strong in Germany

Mercedes-Benz is simultaneously expanding its production capacity in Kecskemet, Hungary, while implementing job cuts and cost-saving measures in Germany. According to Michael Schiebe, Mercedes’ production chief, the Hungarian factory has doubled capacity, becoming the largest Mercedes facility in Europe. Schiebe justified this expansion as necessary to secure jobs in Germany by lowering the company’s overall cost base. The work environment in Hungary, he noted, includes fewer sick leave days and more flexible working hours compared to Germany. However, Mercedes management is proposing that German employees work additional hours without pay increases. The IG Metall union has indicated strong resistance to these plans, with Schiebe warning that Mercedes must become more competitive or face severe consequences.

In sharp contrast, Tesla is aggressively expanding its German operations at its Grünheide facility near Berlin. The electric vehicle manufacturer plans to ramp up production to 7,500 vehicles per week by 2026, which translates to around 375,000 cars annually. This expansion is set to create 3,500 new jobs and supply over 30 markets across Europe. Tesla is also advancing integration of the full value chain—from battery cell production to finished vehicles—in Germany, a move unique in the European market. As of late 2025, the Grünheide site employed approximately 11,000 workers, making it Brandenburg's largest industrial employer.

These developments highlight a stark contrast within Germany’s automotive sector: Mercedes is relocating production to Hungary to reduce costs and introduce stricter labor conditions domestically, while Tesla is investing heavily in expanding German manufacturing and workforce. This divergence underlines the competitive challenges German manufacturers face amid global shifts and domestic labor pressures, as well as the contrasting strategies of established legacy companies versus newer electric vehicle entrants.