Mercedes-Benz Prepares for Tariffs by Emphasizing US Investments and Innovation
Amidst trade war concerns, Mercedes-Benz (MBGAF) is implementing strategies to mitigate potential tariff impacts. CEO Ola Källenius emphasizes the company's American identity and substantial investments in the US.
US Presence and Investments
Källenius highlights Mercedes-Benz's strong US presence, with two production plants and over 11,000 direct US employees. Two-thirds of vehicles produced at the Tuscaloosa plant are exported globally, a significant portion to Europe.
"We're an American company," Källenius declared, noting his personal connection to the US and the company's commitment to continuing investments. "We plan to grow our footprint in the United States and remain a major industrial exporter from the US."
Innovation and Cost Optimization
To bolster profitability, Mercedes-Benz is slashing production costs by 10% by 2027 and prioritizing electric vehicles (EVs) and hybrids. Unit sales decreased year-over-year, and operating margins are expected to land between 6% and 8% in 2023.
Industry Concerns
The auto industry faces potential disruptions due to President Trump's proposed automotive tariffs. GM CFO Paul Jacobson and Ford CEO Jim Farley have voiced concerns about the impact on profitability and jobs. Mercedes-Benz sold over half of its 374,000 US vehicles last year through imports. Germany exports more cars to the US than any other country, but the VDA auto association considers tariffs to be an ineffective negotiating tool.
Call for Reconsideration
Källenius urges policymakers to reconsider tariffs, highlighting Mercedes-Benz's economic contributions and deep US ties. The company remains committed to investing and creating jobs in the US, emphasizing the importance of fostering international collaboration.