Industry: Gesamtmetall calls for reforms and warns of further job cuts

Berlin. In view of a gloomy forecast for the metal and electrical industry, the employers' association Gesamtmetall has called on the federal government to urgently reform taxes, social security contributions and bureaucracy. On Friday, Managing Director Oliver Zander particularly sharply criticized Finance Minister Lars Klingbeil's budget policy. “The bladed ax doesn’t save a penny,” said Zander.

The background is the demand to relieve companies and stabilize social contributions. To this end, the association is demanding that the federal government finance the health costs of those receiving basic security more from tax revenue. In order to raise the money for this, Klingbeil had to “go through everything and save massively”.

The reason is a quick survey by the association, according to which two out of five companies in the metal and electrical industry rate their business situation as poor. 42 percent are planning to reduce their workforce in the next six months. In the next three to five years, more than 10,000 companies expect shrinkage, and around 1,000 locations are at risk of closure, according to the association's calculations.

According to total metal, the industry's production is expected to decline by another two percent in 2026. This means that the area is heading for a third year of recession in a row. Compared to 2018, production is 15 percent lower. Around 350,000 jobs were lost in the same period. Around 10,000 jobs are currently being cut in the industry every month.

It is particularly worrying that rising orders are increasingly rarely leading to additional production in Germany. In 65 percent of the companies surveyed, new orders are not or only partially reflected in domestic production. The most common reason given by affected companies was production abroad. “Domestic orders do not mean domestic production,” Zander said. Foreign locations are often more economical due to lower costs and better conditions.

The association warned of deindustrialization. Investments in machinery and equipment remained far behind the previous trend. The resulting investment gap since 2020 amounts to around 65 billion euros. Labor costs, energy prices and bureaucracy are the biggest obstacles to investment. Individual growth areas such as the defense industry could not compensate for the broad decline. “We haven’t had a crisis like this since the founding of the Federal Republic,” said Zander.

In Germany's largest industrial sector, with around 3.7 million employees, negotiations are currently underway with IG Metall about a new collective agreement. The second round of negotiations begins on Tuesday. The peace obligation expires at the end of October, after which warning strikes are possible. The union is demanding five percent more money over a period of twelve months.