Mercedes-Benz Prepares for Trade War by Emphasizing US Investment
Mercedes-Benz (MBGAF) is countering potential tariffs by cutting costs, investing in EVs, and highlighting its significant presence in the United States.
CEO's Message to Trump Administration
CEO Ola Källenius emphasized the company's deep American roots and commitment to the US, stating, "We're an American company... We feel American."
US Operations and Exports
Mercedes-Benz operates two significant facilities in Alabama and South Carolina, employing over 11,000 people directly. Two-thirds of vehicles produced at the Tuscaloosa plant are exported globally, a substantial portion to Europe.
Impact of Tariffs
Over 50% of Mercedes-Benz vehicles sold in the US last year were imported. Tariffs could significantly impact the auto industry, including rivals General Motors (GM) and Ford (F).
Industry Concerns
Automakers are expressing concerns about the potential impact of tariffs on profits and jobs. GM CFO Paul Jacobson warned of the need to reconsider plant allocation and investment decisions if tariffs remain permanent.
Mercedes-Benz's Response
Mercedes-Benz is implementing cost-cutting measures while focusing on EV and hybrid technologies. The automaker reported a 2024 revenue decline of 4.5% and a 31% drop in operating profits, driven by weakened demand in China. Operating margins are projected to range from 6% to 8% in 2025.