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Supporting Mercedes CEO's Call for Lower Costs in Germany

Published July 28, 2026 at 5:02 PM UTC

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Ola Källenius is doing Germany a favor by speaking bluntly about its declining industrial competitiveness. The fact that Hungary offers 70 percent lower production costs is a stark signal that policymakers must act. Germany's energy-intensive manufacturers cannot sustain exorbitant power bills and red tape while competing globally. Mercedes-Benz is a bellwether for the entire economy; if it cannot remain profitable at home, thousands of jobs are at risk. Rather than criticizing the CEO, critics should understand that his warnings are rooted in reality. The profit drop in China exacerbates the problem, leaving less room to absorb inefficiencies. Moving some production to Hungary or other low-cost sites is not a betrayal of Germany but a survival strategy. It allows Mercedes to keep its overall workforce viable by protecting margins. Other nations, including the United States and France, actively subsidize their industries and streamline regulations. Germany must do the same or risk a hollowing-out of its industrial base. The CEO's comments should be seen as a plea for partnership with the government, not a threat. The sooner Berlin addresses high energy prices and bureaucracy, the better for everyone—workers, suppliers, and the company itself.