Global Competition

Germany's Top Three Automakers Continue to Lose Ground

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IG Metall Mobilizes Against Job Cuts

In light of these problems, a number of job-cut programs are underway that will span several years. Tens of thousands of people are affected—including those at Mercedes-Benz, BMW, the Volkswagen Group and its affiliated brands, as well as suppliers such as Bosch, Aumovio, ZF Friedrichshafen, and Mahle. At VW, the closure of the VW plants in Hanover (Germany), Emden (Germany), and Zwickau (Germany), as well as the Audi site in Neckarsulm (Germany), is also on the table. In response, the IG Metall union is organizing protests today at some 200 locations.

Under the slogan “A Future Instead of Mass Layoffs,” the union expects over 100,000 participants. Among other things, it is calling on manufacturers to invest more in German plants—for example, in battery production and autonomous driving.

The VDA Takes a Slightly More Nuanced View of the Situation

The German Association of the Automotive Industry (VDA), on the other hand, believes that unions and employees need to be more open to change. Production in Germany is not a law of nature, nor is plant capacity utilization a given, wrote VDA President Hildegard Müller in a guest op-ed for the Handelsblatt. She cited high labor costs and shorter working hours in Germany as the main competitive disadvantages. An hour of labor costs nearly 65 euros ($74.75) in the German auto industry, compared to 24 euros ($27.60) in the Czech Republic and 18 euros ($20.70) in Poland. In Germany, the average annual work hours are 1,300; in the Czech Republic, 1,800; and in Mexico, over 2,000.

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