Germany in Crisis: New Layoffs, New Strikes Knock Out Industry

A second strike by employees of automaker Volkswagen began on the morning of Monday, December 9. German workers crossed their arms in nine factories across Germany. The strike lasted four hours and foreshadowed a fourth round of collective negotiations between VW senior management, the IG Metall union, and the works council.

According to some rumors stemming from the talks, “the automaker remains firm in its desire to cut wages by 10%” and “close at least three plants in Germany.” Instead, the union insists it is necessary to keep all plants open and provide job security for some 130,000 VW employees. “We have not been able to bring positions closer together, and we are ready for further escalation,” Daniela Cavallo (pictured), president of Volkswagen’s production committee, said after the talks.

The reaction of Saskia Esken, leader of the German Social Democratic Party (SPD), was quite harsh: “Volkswagen managers are blocking constructive discussions on the collective agreement.” According to Esken, managers at the German automaker “need to take a step back and make some concessions to their employees because it is management that is preventing collective bargaining discussions from moving forward.”

“We should be able to save precious jobs in the industry,” Esken emphasized. “The Volkswagen Works Council made a significant contribution. The staff was willing to compromise. But the harsh reaction of VW management and widespread threats of violent measures are unacceptable.”

But the plague of mass layoffs is spreading like wildfire from the automobile industry and the steel mills of ThyssenKrupp to every industry in Germany. German printer manufacturer Heidelberger Druck has announced that it will be forced to cut 450 jobs at its Waldorf headquarters. The move should allow the company to “reduce operating costs at Germany’s largest subsidiary and create space for major investments,” Heidelberger Druck CEO Juergen Otto said.

The situation in German industry will be discussed by Chancellor Olaf Scholz, who will receive key representatives of companies, works councils, and trade unions at a summit on the German steel industry in the afternoon. “The meeting will discuss concrete measures to protect steel production in Germany. It is very important for the government to set reliable electricity prices, as well as to encourage investment and protect against steel dumping,” Scholz said before the meeting.

One way out of the plague of layoffs would be to accelerate the energy transition. To expand the use of solar, wind, and hydrogen energy, companies in Germany will need more than half a million workers by 2030. That is, another 350,000 employees are to be added to the current 200,000 in the next five years. This conclusion was reached by experts of the German Chamber of Commerce and Industry (DIHK). “It’s not just skilled workers such as engineers or wind turbine builders. Bottlenecks in logistics or administration will also jeopardize the energy transition as a whole. For example, the construction of wind turbines can be delayed due to a shortage of truck drivers,” said DIHK deputy director Achim Dercks.