MAN cuts 2300 jobs, automotive industry loses almost 50,000 jobs in one year

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The German automotive industry is having to cope with one piece of bad news after another. The next job cuts are being announced by truck and bus manufacturer MAN, which plans to cut around 2300 jobs in Germany over ten years. The main site in Munich with 1300 jobs, Salzgitter with 600, and Nuremberg with 400 positions will be particularly affected. IG Metall even cites slightly higher figures and is concerned about long-term site viability.

New data from the Federal Statistical Office shows the depth of the crisis in Germany's key industry. According to the data, at the end of the third quarter, there were 48,700 fewer people working in the automotive industry than a year earlier. This is a decrease of 6.3 percent – "higher than in any other large industrial sector with more than 200,000 employees." With 721,400 people, employment in the automotive industry fell to its lowest level since mid-2011.

The automotive industry is struggling with significantly increased US tariffs, a global sales slump, and Chinese competition, particularly in electric vehicles. Recently, there have also been supply bottlenecks for chips from the Dutch manufacturer Nexperia. Automotive suppliers are even more affected by job cuts in the industry crisis than manufacturers, statisticians explained. There is little prospect of improvement: many companies have recently announced job cut programs that will continue for a long time. These include industry giants such as Bosch, ZF Friedrichshafen, but also Mercedes and Volkswagen and its brands, which include MAN.

MAN aims to avoid layoffs

MAN explained the rationale for the cost-saving measures by stating that the group must adapt to the persistently weak truck market in Germany and further improve its cost position. In addition, high electricity and labor costs, as well as increasing pressure from Asian competition, are weighing on the company. However, the job cuts are to be carried out "absolutely socially compatible," as a spokesperson said. Layoffs are not planned. IG Metall and the works council sharply criticize the plans. Sybille Wankel from IG Metall says these jeopardize the existence of the Munich headquarters in the long term.

The union also expects slightly higher figures than MAN. It anticipates the loss of up to 2000 jobs in Munich and 500 in Nuremberg in the long term. The union fears job losses in research and development, which are outsourced to the parent company Traton, partly due to the relocation of production to Poland. Bavarian IG Metall chief Horst Ott announced that he would hold MAN management accountable. He would urgently recommend the board to enter into negotiations and threatens escalation. Ott did not specify what this would entail, but emphasized: As IG Metall, we have "the right tool for every problem. Which one we use depends on the other party."

120,000 jobs lost in industry

However, the automotive industry is not the only sector experiencing job cuts. In the entire German industrial sector, around 5.43 million people were employed at the end of the third quarter, according to the Federal Statistical Office – a decrease of 120,300, or 2.2 percent, in one year.

The data shows where the crisis hotspots in German industry lie, said Sebastian Dullien, scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK) at the Hans Böckler Foundation. Overall, however, the reduction in employment is moderate compared to the decline in production and orders. "It is not too late to save the majority of industrial jobs."

Mechanical engineering also suffering

Significant job cuts occurred in other key sectors, such as mechanical engineering, Germany's largest industrial sector by employee numbers. There, employment fell by 2.2 percent to around 934,200 people by the end of the third quarter. In the chemical industry, there was a slight decrease of 1.2 percent to 323,600 employees within a year, and in the manufacture of electrical equipment, by 0.4 percent to 387,500.

Job cuts were particularly sharp in metal production and processing, with a decrease of 5.4 percent, and in the manufacture of data processing equipment electronic and optical products, with 3.0 percent. According to statistics, the only major industrial sector with employment growth was the food industry, with an increase of 1.8 percent to 510,500 people.

"Germany needs holistic industrial policy"

Germany needs a holistic industrial policy considering the aggressive economic policies of the USA and China, says economist Dullien. The two major powers want to boost domestic production. "This comes at the expense of German industry," says Dullien. "Germany should encourage the EU to define key sectors itself and use the internal market to promote European production in these sectors."

(mho)