12,500 automotive jobs at risk in Germany – Many auto suppliers fear severe job losses

Warnings about massive job cuts in the auto industry are increasing. Nevertheless, the possible remedies remain highly controversial.

Large parts of the German automotive supply industry are preparing for drastic job losses in the event of persistently weak vehicle sales, according to a membership survey by the industry association VDA. In the 132 participating companies alone, up to 12,500 jobs will be on the brink if demand doesn’t pick up soon.


The results of the survey of medium-sized suppliers were available to the German press agency on Monday evening. The analyzed sample stands for a total of around 187,000 employees.

“Under unchanged conditions, 39 percent of the companies will cut staff by the end of June,” said the Association of the Automotive Industry (VDA) in Berlin.” It will be 65 percent by the end of July.” Currently, every tenth company has cut jobs. Three out of five suppliers currently have specific plans for this. As a result, some companies are considering cutting up to 40 percent of jobs.

The association called for a “quick and effective impetus for demand in the automotive market in order to avert a massive loss of jobs and economic substance in a key sector in Germany”. Medium-sized companies in particular are now in danger.

Because sales are on the ground due to the corona crisis, manufacturers are producing in stock and orders have also slumped from suppliers, numerous companies and the prime ministers of the “car countries” of Lower Saxony, Bavaria and Baden-Württemberg had spoken in favor of government purchase premiums . In this way, jobs are to be saved in the industry which, in addition to the pandemic consequences due to the upheaval towards electromobility and digitalization, is already under pressure.

Every second company faces payment difficulties

If the situation remains so tense, many companies would have no choice but to cut jobs, the VDA emphasized. Over half of the companies surveyed said that they would experience payment difficulties within the next three months “if there are no personnel adjustments”. At 93 percent short-time working, on average for around half of the workforce, at nine percent for all employees.

Sales in the export-dependent industry are paralyzing worldwide, only in China the situation has eased somewhat recently. It looks dark on the home market as well: new car registrations in Germany fell by 61 percent in April compared to the same month in the previous year. Companies had to suspend their production to a large extent. At Bosch, the second largest supplier after Continental, bottom line earnings fell by almost half in the first quarter.


VDA Vice Arndt Kirchhoff, representative of the suppliers, had also recently warned against layoffs if politicians rejected incentives to buy. There is already an environmental bonus for electric cars or hybrid vehicles – among other things, the economic wing of the Union faction in the Bundestag does not want any additional subsidies. But environmental organizations or the Greens also criticize the fact that the industry demands the inclusion of cars with modern internal combustion engines.

With regard to the survey, the association said: “The results clearly show the urgent need for action. (…) Liquidity aids are a building block, but they do not solve the core problem of a lack of demand on the automotive market.” After Pentecost, the Federal Government wants to finally advise an economic stimulus package for the German economy.

Author: Nabeel K
Email: nabeel@wheelsjoint.com



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