For me, powertrain-flexible production is
   clearly the way forward

Mercedes-Benz is currently grappling with two major, closely linked challenges: in view of shrinking profits, costs have to come down while sales need to be revived – especially in the still sluggish electric segment. Stuttgart is therefore pinning great hopes on new models such as the CLA, the C-Class and the newly launched electric version of the GLC.

One person who has only recently taken on responsibility for smooth production and logistics processes at Mercedes-Benz is Michael Schiebe. The manager, who until last year was in charge of Mercedes’ performance brand AMG, succeeded Jörg Burzer at the end of 2025 as board member for production, quality and supply chain management. Burzer himself is now head of development at the Swabian carmaker.

On the sidelines of the production ramp-up of the GLC at the Bremen plant, AMS sister-publication, Automobil Produktion spoke with Mercedes’ new head of production about his strategy for balancing cost-cutting with a premium claim, the future of flexible-powertrain manufacturing, the impact of Trump-era protectionism and his honest assessment of when humanoid robots will really get going in the Swabians’ plants.

Mr Schiebe, your predecessor Jörg Burzer focused strongly on maximum flexibility and digitalisation with “Next Level Production”. Where are you deliberately setting new accents and where do you say very clearly: That will remain unchanged?

First of all: over the past few years, Jörg Burzer and the team have done a great many things right. If you look at what we have achieved on the production side, the foundation is extremely strong. Today we are significantly more flexible than before and, with MO360, have built a digital backbone that helps us enormously in the current global situation. But of course we also see that the underlying conditions are changing rapidly. Technological progress, geopolitical developments such as tariffs or stronger regionalisation – all of this forces us to further develop the strategy. One example is our more consistent local-for-local approach, for instance with the relocation of GLC production to the USA.

In terms of content, I am focusing on three priorities: firstly, we must continue to work on efficiency and effectiveness, in other words: keep costs under control, especially because at the same time we have to invest in new technologies. Secondly, quality has absolute priority for me. Our customers make a very conscious decision in favour of the Mercedes-Benz brand and associate it with a clear expectation. We do not just want to meet that expectation, but ideally exceed it. And thirdly, I see enormous opportunities in the field of artificial intelligence and automation, especially in the context of “physical AI”.

For example, in 2023 we already implemented a pilot in the paint shop in Rastatt and, through the use of AI, were able to reduce energy costs by around 20%. There is enormous potential in this. Another important point for me is the organisation: we need to further develop flexibility not only in the production network, but also in our teams. International exchange, cross-functional experience – all of this strengthens our system. I myself have worked in various areas of the company, and it is precisely such perspectives that help to set new impulses.

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Mercedes commits $7bn to its US manufacturing future

With a $4 billion commitment to its Tuscaloosa plant, world premieres of the new GLE and GLS, and a new engineering hub in Atlanta, Mercedes-Benz signals the most consequential expansion of its American manufacturing footprint in a generation.

Mercedes-Benz has already significantly reduced production costs and announced further savings. From your point of view, where are the last “big chunks” of potential cost reductions without jeopardising the premium standards in quality and manufacturing?

I do not see any conflict of objectives here, on the contrary. It is about excellence in processes. If we manage to make our workflows absolutely stable and efficient, we automatically achieve both cost advantages and the highest quality. A key lever here is the intelligent use of technology in interaction with our employees. A good example is our plant in Kecskemét: there we trained the entire workforce for the launch of the electric C-Class using virtual reality applications.

This means employees already know exactly what they have to do at their station, even though the real line is in some cases not yet in place. With this level of preparation, they go into the production ramp-up, which significantly increases quality and efficiency. In addition, we are seeing major progress through AI applications in day-to-day operations. For example, we have introduced a virtual production chatbot: employees can ask questions there, for instance about system maintenance, in their own language and receive the appropriate answer immediately. This works across sites worldwide. Another important aspect is transparency in the production process.

Today, we can track every single vehicle digitally. When we detect deviations, we can very quickly analyse: which vehicles are affected? What was the cause? When did the error occur and when were we able to eliminate it? This massively shortens our response times and increases both quality and efficiency. In the end, this means less complexity for employees, more stable processes and better overall performance. That is exactly where I see the biggest levers.

The Bremen plant is launching the all-electric GLC on a single powertrain-flexible line. From your point of view, is this form of full flexibility a permanent state or just a transitional solution until demand becomes clearer?

Long-term master plans over ten or fifteen years are hardly reliable today, because the environment is changing too fast. Our focus is on being successful in the coming years, and flexibility is currently an enormous help in this. We are seeing very different dynamics in powertrain types around the world. In Europe, there is currently something of a hype around electric vehicles. With the new electric GLC, we have received more orders in the first few months than for any of our previous electric vehicles. At the same time, we are seeing a different development in the US: many subsidy programmes have been scaled back there, which means customers are increasingly opting for combustion engines again.

That is precisely why flexibility is crucial. In the end, it is the customer who determines the pace of the transformation and we have to be able to respond to that. For the short and medium term, powertrain-flexible production is clearly set for me. It allows us to balance production volumes more effectively, act more stably towards suppliers and respond more quickly to changes in demand in the markets. To make a definitive assessment today of perspectives for 2035 would be speculation. What matters is that we roll out the current product portfolio successfully.

We are currently bringing an enormous number of new models into the network, with a ramp-up under way in virtually every plant. That is a major operational challenge, but it is exactly what we have built our system for.

You mentioned the US market: As a reaction to Trump’s protectionism, the GLC is also to be produced in Tuscaloosa in future. When will it start – and will the electric version also be built there?

Besides regulatory factors, proximity to the customer in particular plays a central role. We want to respond even more closely to the needs of our local markets and have had very good experience with this approach in China. There, for example, we offer versions with an extended wheelbase that are specifically tailored to customers’ wishes. We are now pursuing a similar principle in North America as well.

The US market is of central importance to us and, through localisation, we can get closer to customers and align our products more precisely. We plan to start local production of the GLC in Tuscaloosa after 2027. I cannot yet give an exact date today. In the first step, however, we are clearly focusing on the combustion-engine variant.

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Mercedes-Benz to localise GLC SUV production in Alabama amid tariff pressures and market shifts

Mercedes-Benz confirms plans to assemble the GLC SUV at its Alabama plant starting in late 2027, a move influenced by US tariffs and the need for localised production to meet North American demand.

Are we currently experiencing an “electric reset” in the US? Some OEMs have already said goodbye to their ambitious electric plans.

I would not speak of a reset. Rather, we are seeing that the acceptance of electromobility is developing at different speeds depending on the market. In recent years there have certainly been regions and customer groups that were more hesitant. At the same time, we are observing how quickly that can change.

What is the most effective lever?

New vehicle generations make a big difference: more range, faster charging times and significantly improved assistance systems greatly increase everyday usability. This makes the switch to electromobility increasingly attractive for many customers. Our strategy is therefore clear: we are guided by the customer. We offer both electric and conventional powertrains and invest in both technologies.

After all, developments will progress differently from region to region and we want to ensure that our customers everywhere receive the right solution.

However, the multi‑billion investments in Tuscaloosa are also a clear signal to the US government that you are serious about localisation.

Absolutely. The USA is an extremely important market for us. We are very successful with our products and see further growth potential, especially for SUV models such as the GLE and GLS. At the same time, by localising the GLC we are also reaching new customer groups that have not yet had any contact with the brand. In this respect, the investment is clearly a commitment to the market and to a stronger local presence.

Mercedes is currently investing heavily in AI, digital twins and humanoid robots in the production environment. Which applications are already delivering measurable productivity or quality advantages today – and what is still more a vision of the future?

We are no longer talking about the future here, but about applications in the here and now. Artificial intelligence is already providing us with tangible benefits in many areas today – and this goes far beyond classic chatbots. Of course, chatbots help us to process information and communicate quickly. But more important is the use in planning and controlling complex processes. A good example is the integration of new vehicle models into existing production lines. Operationally, this is real “Champions League” and only becomes possible through AI-based planning functions and digital twins.

We first plan processes entirely in digital form, then build the real system and feed the data obtained straight back into the digital twin. This allows us to continuously compare and optimise workflows. The digital and the physical worlds are already closely interlinked here. Humanoid robotics, on the other hand, is still a specific application case. Together with our partner Apptronik, we are making initial progress, both at the Digital Factory Campus in Berlin and in pilot projects at our plants.

In the short term, we see the greatest benefit in monotonous, physically demanding tasks, for example in intralogistics or when lifting heavy loads. In highly complex assembly operations – take the interior fit-out of an S-Class with its enormous variety of variants – humans will remain unbeatable for the foreseeable future.

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AI and robotics dominate Hannover Messe

Between AI, robotics and defence, Hannover Messe 2026 shows which technologies will shape the factory of the future. It also sent important signals for the automotive industry.

So is a humanoid robot like “Apollo” still just a vision of the future when it comes to large-scale series deployment?

The pace of development is currently enormous. We can see that with other technologies as well. Adoption curves today can very quickly become exponential. What matters for us is this: we want to be at the forefront. We test and pilot at an early stage, build partnerships and actively help shape the technologies. Whether large-scale series deployment comes in one, two or three years is difficult to predict today. But we will definitely be ready when the time comes.

You come from the AMG world, where variety, short cycles and high expectations are part of everyday life. Which mindset from Affalterbach helps you most today in the global production network?

I am encountering a very experienced and highly motivated team here, and I would like to emphasise that explicitly. What I would like to add from my career to date is above all a particular way of working that I would describe as an “SME mindset”. Early in my career at Mercedes‑Benz I headed up a smaller national organisation and also experienced at AMG how valuable short decision paths and direct communication are. It is not about hierarchies, but about making sure the best ideas are heard – regardless of the level at which they arise.

I am trying to embody this culture in my current role as well. For me, that includes having experts present their topics directly and take responsibility. At the same time, immediate and honest feedback is important to me, both on critical issues and in the form of recognition. For example, I will sometimes call someone after a meeting and give personal feedback – especially to younger colleagues. This combination of clarity, appreciation and proximity is something I have taken from the SME-shaped environment and that I consciously want to bring into the organisation.

About the person:

Michael Schiebe has been a member of the board of management of Mercedes-Benz Group AG since 1 December 2025 and is responsible there for production, quality and supply chain management. He manages the global production network with over 30 sites for vehicles, powertrains and batteries as well as the worldwide logistics chains.

He is also a member of the board of management of Mercedes-Benz AG. Born on 25 July 1983, he studied international business administration in Stuttgart. Since joining the company in 2007, he has held various positions, including in product management, sales and as CEO of Mercedes-AMG as well as head of the G-Class and Maybach divisions.