Mercedes-Benz Shares Plunge to Yearly Nadir as Labor Tensions Mount Over Pay Deferral and 40-Hour Plan

Mercedes-Benz stock falls to €43.27 as carmaker delays bonuses, pushes 40-hour workweek without extra pay; financial results weaken amid China slump.

Mercedes-Benz shares sank to a new 52-week low on Friday, closing at €43.27 after the carmaker unveiled aggressive cost-cutting measures that include a delayed bonus payment and a push for longer working hours without additional compensation. The stock touched an intraday trough of €43.01, extending its year-to-date decline to nearly 30%.

In a letter to roughly 108,000 employees in Germany, management described conditions at the home base as "dramatic." The first concrete step is a postponement of the so-called transformation component — an annual special payout equal to 18.4% of a worker's monthly base salary — from July 2026 to 2027. The measure affects about 90,000 staff.

More controversially, board chairman Martin Brudermüller is seeking to shift the standard workweek from 35 to 40 hours with no wage adjustment — a demand that the works council immediately rejected, vowing to fight the plan. The proposed changes target development, sales, administration, and production, as Mercedes-Benz argues that its German labor costs are structurally uncompetitive.

The belt-tightening comes as the company's financial performance deteriorates. In the first quarter of 2026, Mercedes-Benz Cars posted an adjusted return on sales of just 4.1%, while group revenue slipped to €31.6 billion and EBIT fell to €1.9 billion — a 17.2% drop. Vehicle sales totaled roughly 419,000 units, with gains in Europe and the US only partially offsetting a slump in China. Earlier this year, the group reported that its 2025 net profit had nearly halved to €5.3 billion.

China remains the sorest spot. Intense competition and tepid demand have weighed on the premium segment that Mercedes-Benz relies on for high margins. The top-end models performed slightly better than the overall mix, but that provided little consolation. The broader market has also been rattled by a profit warning from rival BMW, souring sentiment across the European auto sector.

Technically, the stock is deeply oversold. The relative strength index sits at 29.2, yet clear reversal signals are missing. The 200-day moving average at €55.05 stands more than 21% above the current price, underscoring the extent of the sell-off. Bernstein Research maintained its price target of €61.00 but rates the shares only "market perform," calling for tangible progress on operating margins before any re-rating.

Looking ahead, Mercedes-Benz reaffirmed its full-year 2026 guidance: revenue on par with the previous year, EBIT significantly higher, and industrial free cash flow slightly lower. Investors will get a fresh read on the trajectory at the pre-close call on July 14 and the full second-quarter report on July 28. Until then, the fight over working time and pay is likely to dominate headlines and keep pressure on management.