Disruption "The automotive industry is in a hopeless defensive battle"

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Currently, bad news is piling up from the automotive industry. Is its time as a leading industry in Germany coming to an end? Researchers don't consider this so crucial. What matters is what comes next.

Enzo Weber from the Institute for Employment Research (IAB) sees Germany's industry in a critical phase. "We are losing around 10,000 industrial jobs in Germany every month; production is now 15 percent below the pre-Corona level." A transformation is not problematic in itself, especially since Germany's industry still has great potential and other industrial sectors have promising prospects—such as renewable energies, the hydrogen industry, and the production of innovative substitute products for conventional goods that have so far been made from oil components.

"But the problem is that this innovative new side of the industry is not really getting going—while the more traditional industry is cutting jobs, far too few jobs are being created in the new sectors; overall, the job balance in the industry is in the deep red." The new industrial sectors need to be stimulated to create more jobs there. "So far, we are fighting too much of a defensive battle in the industry, one we cannot win," says Weber.

Further development instead of retraining

From Weber's perspective, many of these employees will be needed in other sectors and companies for the transformation. "We don't need large retraining programs, but rather programs to further develop their skills." The expert also advocates for a transformation competition, in which the state more strongly promotes the founding and scaling of startups than before and stimulates innovation.

Sebastian Dullien from the Institute for Macroeconomics and Economic Research (IMK) of the Hans Böckler Foundation also has furrowed brows. "The risk of deindustrialization in Germany has intensified." Germany faces a fate similar to that of the USA, which has massively cut industrial jobs since the turn of the millennium.

Scientist demands: state must invest

While the number of industrial jobs in the USA declined from nearly 18 to just over 13 million between 2000 and 2024, the number in Germany remained nearly constant from 2000 to 2019. Since the COVID-19 pandemic, the number has decreased from 7.5 to 7.2 million—this downward trend could now intensify, warns Dullien.

The scientist sees the state as having a duty: strong investments in building roads, bridges, and energy networks would lead construction companies to get more contracts and hire more people. "In other industrial sectors, there are many craftsmen and other skilled workers who originally came from the construction industry and could now return there."

Role of the skilled labor shortage

But isn't there supposedly a shortage of skilled workers in Germany—aren't the employees whose jobs are now at risk needed elsewhere? "There may be a shortage of IT experts and caregivers, but that doesn't help the employees who are working on the assembly line at car manufacturers and will soon need a new job," says Dullien. It is all the more important that these industries develop future prospects and not just cut back.

Paula Risius from the German Economic Institute (IW) considers it a challenge to relocate employees from an industrial company elsewhere; after all, both the type of qualification and the regional demand must be present. "Companies must be open to career changers, but lateral entrants must also invest in this process," says the researcher.

Career changers do not always bring the required skills. "For employers, this means that career changers may initially be suitable for fewer tasks or that they need more time than existing skilled workers." Therefore, wage reductions are "not unlikely."

Long list of job cuts

The list of industrial companies in Germany that have tightened their belts this year and are determined to save at all costs is long: Volkswagen, Bosch, ZF, Continental, Bosch, and Ford, as well as the steel sector of Thyssenkrupp. In the case of Ford Germany, whose Cologne workforce is expected to shrink by a quarter over three years, IG Metall warns of a "death by installments," and at Thyssenkrupp Steel, employees are also concerned about the future of their company.

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The list could go on, with bad news arriving almost daily. Most recently, Ford's works council now sees the entire future of the US automaker in Germany at risk. "This is a massive threat to the location," said Ford Germany's works council chairman Benjamin Gruschka, calling it a "brutal downsizing plan." Schaeffler is cutting 4,700 jobs in Europe, closing a plant in Berndorf (Austria) and one in Sheffield (UK). And Elring Klinger is closing a plant in Thale in the Harz region with 33 employees.

The examples illustrate: Germany's industry is in transition—it's not just about temporary demand weakness due to the sluggish economy, but about structural changes, on which scientists largely agree. The situation is serious, but by no means hopeless—that’s how one could summarize the opinion of the experts.