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May 15, 2020 2:45 PM, EDT

Daimler Halts SUV Production at US Plant Over Mexico Parts Delays

New Mercedes-Benz SUVs, manufactured by Daimler AG, on March 31.New Mercedes-Benz SUVs, manufactured by Daimler AG, on March 31. (Olivier Matthys/Bloomberg News)

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Daimler AG is suspending production at a Mercedes-Benz SUV plant that was one of the first in the U.S. to reopen due to a shortage of parts supplied from Mexico.

The Alabama factory won’t build vehicles next week, according to an internal notice viewed by Bloomberg. Workers are being given the option to use vacation time or go without pay and file for state and federal unemployment benefits.

“Due to respective country-specific regulations and their impact on international supplier sites, we expect a temporary interruption,” the company said in an emailed statement.

The Mercedes plant reopened late last month after idling for five weeks as much of the U.S. manufacturing base was shut down to contain the coronavirus outbreak. Now, as U.S. carmakers plan to restart their operations beginning next week, Mexico’s government has sent mixed messages as to how soon it will allow auto companies to reopen.

Daimler said in its internal notice to workers at the plant in Tuscaloosa County, Ala., that the factory will schedule make-up production for June 29 through July 1, a week that the factory had been slated for a summer shutdown. The facility builds GLS and GLE SUVs as well as C-Class sedans.

Mexico said May 15 that it will allow the auto industry to begin restarting operations next week, as long as companies have safety protocols in place. Health officials in the country say details of those requirements may be released as soon as May 18.

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