Daimler to make batteries at German Mercedes plant

FRANKFURT -- Daimler has struck a deal with workers to make electric car components and batteries at the Mercedes-Benz factory in Untertuerkheim, near Stuttgart, in addition to combustion engines, transmissions and axles.

Untertuerkheim is operating at full capacity. But the 19,000 workers at the plant demanded assurances that jobs would be guaranteed as the auto industry shifts to electric cars, which have fewer components than diesel- or gasoline-powered vehicles.

Workers at Untertuerkheim went on strike this month, leading to the cancellation of overtime shifts to make the new Mercedes E-class model and forcing the management into talks.

As part of the deal, Untertuerkheim will become a competence center for integrating the electric powertrain into production, and will include a battery production facility. Daimler currently has two battery plants in Kamenz and one in Beijing.

The agreement created more than 250 new jobs in the field of electric vehicle production, Daimler said.

Powertrain modules for electric vehicles will be assembled in Untertuerkheim and supplied to other locations such as the Mercedes passenger-car plant in Sindelfingen, where the automaker produces the S-class flagship sedan.

"With this further development, Untertuerkheim will continue to be the lead plant in the global powertrain production network," Mercedes-Benz Cars production chief Markus Schaefer said.

Battery production will begin at the end of the decade at the plant, with the manufacture of electric modules and rear axles following shortly after, a Daimler spokesman told Automotive News Europe.

The labor pact includes changes to the plant's shifts and flexible workforce measures, as well as assurances that Mercedes will develop Untertuerkheim into a competence center to test electric-drive prototypes.

"We are getting a project house in which experts from our r&d department will develop know-how for the electric-drive systems of future EQ models," Wolfgang Nieke, chairman of Untertuerkheim's works council, said in a statement.

By 2025, full-electric vehicles will likely account for between 15 percent and 25 percent of Mercedes' total global unit sales.

The automaker plans to launch a total of 10 SUVs, sedans and compacts under its new EQ subbrand by this time. The first model, a crossover based on the Generation EQ concept, will arrive in 2019.

Automotive News Europe contributed to this report