Key facts
- The German car industry is facing a potential collapse of employment due to intense competition.
- Volkswagen is preparing to propose up to 100,000 job losses to its supervisory board.
- The German Association of the Automotive Industry (VDA) suggested opening plants to foreign manufacturers to save jobs.
- Europe's car production capacity reportedly exceeds demand by more than 5 million vehicles per year.
- The VDA stated that Germany and Europe require 'bold decisions' to navigate the current economic crisis.
The German automotive industry has issued a stark warning about potential widespread job losses across Europe, attributing the crisis to intense competition from Chinese manufacturers and other rivals. The German Association of the Automotive Industry (VDA) stated that "bold decisions" are necessary, including potentially handing over some German car plants to foreign ownership to preserve employment.
Hildegard Müller, president of the VDA, emphasized that economic realities have outpaced political objectives, increasingly endangering jobs. She noted that the industry's current trajectory is unsustainable, suggesting that keeping all factories and suppliers open under the present conditions is impossible. Müller proposed that opening locations to foreign manufacturers could be a viable strategy to secure jobs.
A recent report by Boston Consulting highlighted that Europe's car production capacity now exceeds annual demand by over 5 million vehicles, equivalent to 35 production sites. This overcapacity, coupled with fewer car purchases, is creating significant pressure on the industry.
Volkswagen is reportedly preparing to formally propose up to 100,000 job losses to its supervisory board, a figure double previous estimates and considered an "earthquake" for the sector. This move has already triggered protests, with the trade union IG Metall organizing a day of action across various Volkswagen locations. The VDA stressed that political leaders in Berlin and Brussels must recognize that factories cannot be shielded from evolving business models and that difficult decisions involving significant changes for workers are unavoidable.