The German automotive industry is on the precipice of catastrophe, with up to 100,000 jobs potentially lost unless drastic measures are taken to address the existential threat posed by Chinese competition. The warning comes as Volkswagen prepares to propose its radical restructuring plan to its supervisory board, a move that has already sparked widespread protests among its workforce.
The German Association of the Automotive Industry (VDA) is sounding the alarm, suggesting that handing over some car plants to foreign ownership could be necessary to safeguard jobs. Hildegard Müller, president of the VDA, highlighted the stark reality facing the industry: "reality has overtaken political goals and approaches, increasingly jeopardising jobs." This is a sector that directly and indirectly employs an estimated 3 million people – its health is often seen as a barometer for industrial strength across Europe.
According to a recent Boston Consulting report, Europe's car production capacity now exceeds demand by over 5 million vehicles annually, equivalent to approximately 35 production sites. This has been exacerbated by declining car purchases and Chinese overcapacity, forcing the VDA to point to deeper systemic changes in the industry.
Volkswagen's comprehensive cost-cutting programme, which includes up to 100,000 job losses by 2030 – double its initial target – is set to be put before its supervisory board on Thursday. The trade union IG Metall has called for a day of action at all VW locations, with protests planned in Emden, Zwickau, Hanover, and Kassel, and further events anticipated at Porsche, Audi, and MAN.
The VDA is urging politicians to acknowledge the evolving business landscape and work with stakeholders to find solutions. The association warned that remaining "blind" to these changes would have profound consequences for society, necessitating difficult decisions developed through dialogue with all parties involved.