Mercedes Cuts Alabama Plant Production

While premium automakers Bentley, Lamborghini, Maserati, Porsche and others are reporting record global sales and profits,

Stuttgart-based Mercedes-Benz is cutting production of its Alabama-made sport utility vehicles.

Sales of five-passenger ML-Class and seven-passenger GL-Class and R-Class crossovers were off by 11.9-percent last month compared to June of 2007, resulting in a total of 5,090 units delivered. While the majority of reports cite reduced consumer demand for mid- and full-size SUVs due to rising fuel costs as the source of the problem, it should be noted that Alabama builds some of the most fuel efficient crossover SUVs within their given segments and therefore other factors may be at play.

A move to even greener technologies for these SUVs, Mercedes' Bluetec clean diesel for 2009 versions of the ML320 CDI, GL320 CDI and R320 CDI, should help boost sales, as these models are now 50-state legal, adding California, New York, Maine, Massachusetts and Vermont to the 45 states the old ML, GL and R diesels could be sold into.

Nevertheless, this is the first time that Mercedes has cut U.S. production and therefore is a clear sign that the current economic crisis is beginning to affect the premium class.

The decision will affect 4,000-plus Alabama plant workers, and many supplier companies and their employees.