Mercedes-Benz has hit pause on all spending in its German plants since October, after talks to cut labor and production costs didn't work out.
A leaked memo warns that if things don't improve, some factories could even shut down.
On top of that, Chinese carmakers are stepping up their game in Europe, making the competition even tougher.
Volkswagen and Schaeffler face job cuts
This isn't just a Mercedes problem: Volkswagen is also in restructuring talks with Germany's biggest union over possible job cuts and plant closures.
Auto supplier Schaeffler is slashing jobs too.
Industry experts say the shift away from traditional cars could put at least 200,000 German auto jobs at risk by 2030.