Mercedes Contract Manufacturer to Cut One-Third of Staff
European Carmakers Contend With Excess Capacity as Chinese Manufacturers Take Larger Share of Market
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Finland’s Valmet Automotive Oyj, which produces several models for Mercedes-Benz Group AG, plans to shed almost a third of its employees in the latest sign of pervasive weakness among European carmakers.
The contract manufacturer will cut jobs, lay off employees temporarily and reassign them to new roles at its Uusikaupunki factory, the company said in a statement on Sept. 23. The reductions are equivalent to the annual working hours of a maximum of 1,075 staff, or around 30% of employees.
Valmet Automotive has manufactured the Mercedes-Benz A-Class model since 2013, and also makes the GLC sport utility vehicle as well as the Mercedes-AMG four-door GT Coupé, according to a spokesperson. Earlier this month, it took a strategic decision to enter the defense industry, also as a contract manufacturer, and to separate its battery-pack making business into a another company.
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European carmakers are contending with excess capacity as Chinese manufacturers take a larger share of the market, with the electric vehicles segment in particular suffering from weak demand.
Earlier on Sept. 23, Stellantis NV said it would temporarily halt production at plants in Italy and France, citing lagging demand. Last week, both Porsche AG and its parent Volkswagen AG cut their outlook for the year.
Written by Kati Pohjanpalo and Kirsi Heikel
