Schaeffler is closing several locations and cutting thousands of jobs. Not an isolated case, but symptomatic of the difficult situation of German automotive suppliers. Tens of thousands more jobs are likely to be lost. But things could start to look up again in the foreseeable future.
Bosch, ZF, Mahle - now Schaeffler is also tightening its austerity measures. Not only the car manufacturers, but also their large German suppliers are cutting tens of thousands of jobs. A significant proportion of jobs in the automotive industry are falling victim to electromobility, that much was clear. Significantly fewer people are needed to produce electric cars due to the smaller number of components. But the job cuts in the industry are significantly greater than expected. Their structural crisis is to blame.
Schaeffler is a prime example of this, as industry expert Stefan Bratzel explains in an interview with ntv.de. The Bavarian company is still very much attached to the combustion engine and transmission area. “The suppliers still have too much of what will become less important in the future and too little of what will play a major role in the future,” says the head of the Center of Automotive Management at the University of Applied Sciences for Economics in Bergisch Gladbach. The resulting job cuts are further exacerbated by several factors.
Like the companies in the industry themselves, observers criticize excessive location costs in Germany, which result from comparatively high wages, but also energy and bureaucracy costs. In addition, the German auto industry's pace of electromobility is not sufficient given the great competitive pressure from China. In addition, German manufacturers and suppliers urgently need to further expand their new business areas, for example in the areas of robotics, AI and automated driving, warns Bratzel.
Making matters worse is the weakness of the European car market, which he believes will continue. Compared to before the pandemic, around ten percent and therefore around two million fewer cars are likely to be sold in Europe over the long term; last year there were fewer than eleven million. “Of course, this also particularly affects suppliers from Europe like Schaeffler.”
In this difficult situation, around 143,000 jobs had already been lost in the German auto industry by the middle of this year, compared to the peak of 834,000 employees in 2018. Bratzel had already predicted the magnitude of around a fifth in 2017, albeit assuming a significantly faster ramp-up of e-mobility. The fact that the job losses still occurred shows that they are greater than expected and are not only attributable to electromobility. “The job cuts we are seeing today clearly go beyond what the pure drive change would explain,” says Bratzel.
Looking only at suppliers, the number of employees fell from around 350,000 to around 262,000 during the period - a decline of around a quarter. In the next two years, Bratzel expects further job losses as a result of the deep crisis in the auto industry. A further job cut of around ten percent or around 25,000 jobs is expected among direct suppliers alone. In his estimation, the bottom should be reached in 2028, after which the number of employees in the industry could rise again.
The Association of the Automotive Industry had also called for an end to the combustion engine with a view to jobs. According to Bratzel, the now foreseeable weakening of the EU's CO2 regulations has not gained anything more than a little time. Nothing is likely to change in the transition to electromobility. According to the expert, German manufacturers and suppliers urgently need new value creation elements in addition to their restructuring programs. "That applies to Schaeffler, but also to other players."
The industry expert calls for a new risk culture and a return to the tinkering mentality that once made the German economy so strong. Despite the harsh consequences of the crisis, Bratzel has hope for the German auto industry and calls for a more positive view. "The glass is half full, we have to fill it again." Industry observers are also optimistic that German car manufacturers have now bottomed out in terms of their lack of innovation in the area of electromobility. Although Chinese manufacturers are still stronger, things are no longer going up for them - in contrast to the German car manufacturers, who are now on the rise.
