Mercedes wants more hours for the same pay, but an hour only gets cheaper if someone buys it
28 September 2026, 09:33
Today, at the Mercedes-Benz plant in Untertürkheim, on the edge of Stuttgart, a workers' meeting is scheduled. On the table is a proposal from the works council, the body elected by the employees: a 30-hour week.
It is the latest move in a negotiation that has been going on for months. The German metalworkers' collective agreement sets the working week at 35 hours. Chief executive Ola Källenius wants 40, on the same pay as today; in talks with the works councils, according to Handelsblatt, management has put 38 on the table. If no agreement is reached, the group is threatening to close two German plants and move more production to Hungary, where, according to Mercedes itself, making things costs a great deal less. The metalworkers' union, IG Metall, replies that the 35-hour week is not up for negotiation.
Whoever comes out on top, the dispute airs in public a question every manufacturing business ought to ask of its own accounts: what does an hour of work really cost?
More hours for the same pay lower the cost of every hour paid
Management's sums are simple. A worker who goes from 35 to 40 hours on the same pay packet costs the company the same amount, spread over five more hours. Every hour paid costs 12.5 per cent less: out of every eight hours, one comes free.
Put like that, it looks like a clean saving. But there is a detail that management itself has made known to employees, as reported by Reuters: in the German plants, production capacity is well above demand. In other words, the factories could already make more cars than people buy.
An hour nobody buys costs just the same
If the number of cars sold stays the same, five extra hours per head do not become five hours' worth of extra cars. They become the same output made by fewer people. That is the point IG Metall keeps hammering home: lengthening the working week without more orders, the union argues, serves only to cut jobs.
The same thing happens with a gym membership. It costs the same whether a member goes three times a week or once a month: the price of each visit is set by how often they go, not by how many hours the gym stays open. If the owner extends opening hours to midnight, the member who goes on Thursdays does not save a single euro. And the member who goes once a month pays as much per visit as for a private session, without ever having asked for one.
Whatever today's meeting decides, whether 30 hours or 40, the underlying question stays the same: how many hours to pay for the cars the market buys.
The real hourly cost is calculated on the hours that end up on an order
For an Italian business doing made-to-order work, the Mercedes case is distant only on the surface. Many companies that sell processing work price their quotations on an hourly cost basis: the cost of the department, people and machines, brought down to one hour of work. The question that decides whether that quotation makes or loses money is a single one: which hours?
The hours paid in wages also include those in which nothing is produced that a customer will buy: waiting for material, changing tooling between one batch and the next, the part that has to be redone, the machine standing idle because there is no order. In a department wages are paid regardless, whether the machine is running or not. So those hours do not disappear: they end up spread over all the others.
An example. A department costs €50 for every hour paid. If only 80 per cent of the hours paid end up on a job order, the hour the customer buys costs €62.50. A quotation priced at the cost of the hour paid loses money on every hour, before any profit has even been added.
Accounting does not count the hours sold
That number is not in the financial statements, which say how much staff cost over a year, not how many of their hours turned into product sold. The real hourly cost is worked out outside the accounts, by recording the actual time taken by each stage of work: how many hours went on the parts delivered, how many on waiting and rework. No complicated system is needed. What is needed is the method, and a department that logs its times every day.
The difference between the two figures, hours paid and hours sold, is margin lost without anyone seeing it. It can be reduced in two ways: by selling more, or by filling the hours already being paid for more fully, with less waiting, fewer tooling changes and fewer parts to redo. Lengthening the working week is not one of the two.
An extra hour lowers the cost of the hour paid. Only an extra customer lowers the cost of the hour sold.
This article was prompted by a news item published in Handelsblatt.