Mercedes Production Is Taking A Beating

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Daimler is preparing to close all its car, van, and commercial vehicle plants for two weeks or more.

Daimler AG, parent company to Mercedes-Benz and Smart, has made the difficult decision to pull the plug on most of its European production facilities as the novel coronavirus COVID-19 sweeps through Europe and the rest of the world. Daimler's actions constitute just the latest in a rash of manufacturing plant closures around the globe, including the suspension of the Big Three's production in the US.

Daimler says it will suspend operations at its European car, van, and commercial vehicle facilities "initially for two weeks," aware that it could take longer for fears over the virus's spread to die down, but it's not just Daimler's own readiness to resume work that counts.

Daimler AG
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In a statement, Mercedes-Benz's parent company acknowledged the difficulties plaguing auto parts suppliers around the globe, saying "global supply chains... currently cannot be maintained to their full extent." Automobiles have among the most complicated, globally interconnected supply chains of any industry, so that just a few worldwide supplier plant closures is effectively all it takes to create the sort of parts shortages that can bring production screeching to a halt.

It's not just for Mercedes-Benz and Smart that Daimler is pausing European vehicle production, in other words; it's for all the suppliers that provide parts the parts used in Mercedes and Smart vehicles.

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This could mean a diminishing supply of Mercedes vehicles in the US; while the German premium brand does have an assembly plant in Alabama, that facility puts out just a limited roster of products, including the Mercedes-Benz C-Class, the GLE-Class, GLE-Class Coupe, and the opulent GLS-Class. But then again, we can't imagine there are too many people going new car shopping at the moment, so whatever inventory is available might well be enough to meet demand.

In its statement, Daimler said its minimum-two-week closures will help "to protect its workforce, to interrupt chains of infection and to contain the spread of the pandemic," as well as allowing the company to prepare for lower future demand.

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