A 40-hour week is normal in the automotive sector when you work in France, in the USA, or in China. Germany trimmed it to 35 hours when its carmakers were on the top of the world, and unions demanded better conditions. But in the changing reality of low-wage production, these privileges are now being pressured.
Martin Brudermüller, chairman of the Mercedes-Benz supervisory board, told Handelsblatt this week that Germany should “seriously pursue a return to the 40-hour working week.”
Brudermüller, who also served as BASF’s CEO for six years, is sounding the alarm over rising costs. In his words, German labor has become “too expensive by international standards.” The country “no longer has a productivity advantage over key competitors.”
The chairman’s proposal is independently backed by the Cologne Institute for Economic Research, which put numbers on the problem. German unit labor costs in 2024 were 22% higher than the international average. Only Denmark and Belgium, where indexation plays a strong part in wage calculation, were more expensive.
Expanding on the problem, Brudermüller laid out two options. “Either you cut salaries or people work longer for the same salary.” Pay cuts are “not reasonable in practice.” Working more hours is.
Negotiations ongoing
Unsurprisingly, Brudermüller is on a collision course with Germany’s biggest union, IG Metall. The 35-hour workweek began in the German metal and electrical industries 31 years ago.
Though not legally required, the 35-hour week became standard at Mercedes, BMW, Volkswagen, and most major German automakers. Tesla’s Grünheide plant remains the notable exception: it has no collective agreement and has resisted IG Metall’s demand for a 35-hour work week.
Belgium offers a middle ground. Volvo Car Gent runs a 39-hour week, closer to the 40-hour model employers want in Germany, but offsets it with ADV days and benefits such as meal vouchers and eco-vouchers.
German premium-car workers still tend to earn more per hour and work fewer hours, with the 35-hour week reinforced by 30 days’ leave and sector-wide holiday and Christmas bonuses.
Opening formal talks
In Germany, the idea seems scheduled for debate at the negotiation table. Mercedes HR chief Britta Seeger confirmed to Bloomberg that the company will open formal talks with union leaders on “additional cost-cutting and competitiveness measures.”
Brudermüller also wants Germans to work longer into old age. With an aging population, he said, the pension system “cannot be financed without a longer working period.” He claimed work keeps people healthy and gives them purpose. IG Metall will probably object to every word of that phrase.
Margin down by more than 3%
The German government is preparing its own shake-up of working time. The coalition plans to replace the current eight-hour daily limit with a weekly maximum of up to 48 hours.
A draft bill is expected this month. Employers need this flexibility to cope not only with the rise of Chinese manufacturing but also with wage advantages in southern EU states like Spain.
Mercedes is pursuing a 10% cost cut, but divisional margins collapsed to 4.1% in the first quarter of 2026. That is 3.2 percentage points lower than a year earlier. Its fellow car makers in Germany are suffering similar downturns.
BMW issued a profit warning this month, while Volkswagen has admitted that its original cost-cutting plan to lay off 50,000 of its workforce won’t suffice. Germany seems no longer able to uphold the social progress it had achieved as a global industrial leader.
