VDMA: Mechanical engineering settles accounts with government - “stunned”

Dusseldorf. The German mechanical engineering industry's patience is breaking: With an angry speech, the president of the industry association VDMA sharply attacked the federal government and accused it of endangering Germany as an industrial location with internal disputes and a backlog of reforms.

"A year ago I said at this point: We are angry. Today I have to say: We are stunned," said VDMA President Bertram Kawlath on Tuesday at the start of the mechanical engineering summit in Berlin. He was stunned by the “whitewashing of many government statements” and the “obvious decline of our location.”

The list of allegations is long: Kawlath denounced a blockage in labor market reform, excessive bureaucracy and an excessive tax burden. A study commissioned by the association shows that just one hour of extra work per week could increase economic output by around 549 billion euros in ten years and create 120,000 additional jobs. The VDMA President also called for more decisive action against unfair competition from China. “If China plays unfairly, Europe must defend itself appropriately,” emphasized Kawlath.

The association backs up the criticism with numbers. For the current year, the industry expects a real production decline of two percent. However, there is hope for 2027 with an expected increase of three percent, which will primarily be driven by orders from abroad. Domestic demand, on the other hand, is stagnating, which underlines the weakness of Germany as a location. Despite the harsh criticism, Kawlath concluded conciliatorily: "Germany is not a case of restructuring. Germany is a design project. But anyone who wants to create has to act."

The industry, which is the backbone of the German economy and employs over a million people, has been struggling with dwindling orders for some time. 2026 is therefore expected to be the fourth consecutive year of a decline in production. The medium-sized sector had originally expected stagnation, but then reduced this forecast to a minus of two percent in September. For the expected recovery, the association is relying on a robust global economy, increasing investment in equipment and government economic stimulus in Germany.