Germany: Avalanche of Layoffs, Tens of Thousands of Workers Plunged into Poverty
Hundreds of small and large companies in the maelstrom of the German car industry crisis
The crisis of the automotive industry in Germany and Europe is now causing a chain reaction: following the Volkswagen Group, also the German company Schaeffler, specialized in the production of components not only for the automotive sector, but also for the aerospace and defense industry, announced that it “will be forced to cut 4700 jobs in Europe, of which 2800 layoffs will affect plants in Germany.” The company, which currently employs more than 120,000 people worldwide, announced that the first ten facilities in Germany and five others in Europe are affected.
In this extreme situation, German Chancellor Olaf Scholz will meet again with Finance Minister Christian Lindner and Economy Minister Robert Habeck (pictured) on Tuesday, November 5. This is the second summit of the three politicians after the one held the day before. Scholz’s office said the talks will center on “an agreement on a common economic and financial political line between the three parties in the ruling coalition – the Social Democratic Party (SPD), the Liberal Democratic Party (FDP), and the Greens – to avoid a political crisis in Germany.”
Between the two meetings, Habeck said the German government was “going through difficult times” while “the last few days have been very negative” for Germany. Commenting on the political crisis the ruling coalition is facing, Habeck said that “in light of the situation in Ukraine, the US elections and the economic situation in Germany, this is the worst time for a government to fail.” The key question is this: is the government honoring the commitments it made when it came to power? We have a responsibility to focus on the challenges ahead of us, and we urgently need a growth incentive.”
Instead, according to Sahra Wagenknecht, leader of the Sahrah Wagenknecht Union (BSW) (pictured), the German government “should end cooperation between the coalition parties and call new elections as soon as possible.” According to Wagenknecht, “another fourth year of this government will mean an irreversible overturn in the German economy and will destroy the prosperity of millions of people. The coalition is delaying the breakthrough for fear of a negative reaction from voters and fear of a new election campaign. The Chancellor should immediately seek a vote of confidence in Parliament to pave the way for a new election, rather than wait to see how long the Liberal Democrats can pull the strings.”
And in this political and economic chaos, there is certainly no shortage of totally unexpected turning points. According to German newspaper Bild, the alliance of the Christian Democratic Union (CDU) and the Christian Social Union (CSU), until recently the main proponent of an “accelerated energy transition,” is preparing “a plan to return Germany to the use of nuclear energy if it wins the next federal election.”
In its pages, Bild cites a document prepared by the CDU-CSU parliamentary group entitled “Energy Agenda for Germany,” the main goal of which is “a massive reduction in energy costs for German citizens.”
“Closing the nuclear power station in 2023,” the document says, “at the height of the energy crisis was a misguided and ideologically driven decision by the coalition parties. Research and development of fourth- and fifth-generation nuclear power plants and small modular reactors (SMRs) should also continue.”
Another last-minute decision concerns the use of funds that until recently were earmarked for the construction (now suspended indefinitely) of a chip factory of the American company Intel in Magdeburg. As Habeck stated, “10 billion euros will have to be used to plug holes in the German federal budget.” According to the Minister of Economy, “ten billion was directed to the Climate and Transformation Fund to support the economy, but it is now clear that it will be used to reduce the fiscal black hole.”
