German carmakers are seeking to increase the standard workweek from 35 to 40 hours to cut costs, facing stiff opposition from labor unions.
Key facts
- •Volkswagen plans to cut approximately 100,000 jobs worldwide by the end of the decade.
- •BMW announced plans to reduce its workforce by up to 8,000 employees by the end of 2027.
- •The number of people employed in the German automotive industry fell from 830,000 in 2018 to under 700,000 currently.
- •IG Metall scheduled nationwide demonstrations for September 21 to protest job cuts and working condition changes.
- •The 35-hour workweek in the German auto industry originated from collective bargaining agreements in the 1980s and 1990s.
Germany's automotive industry is facing a significant downturn driven by high manufacturing costs, international competition, and the transition to electric vehicles. Major manufacturers including Volkswagen, Mercedes-Benz, and BMW have announced production cuts and workforce reductions. To address rising labor costs, industry leaders are proposing an increase in the standard workweek from 35 to 40 hours without additional pay, a move that has met strong resistance from the IG Metall trade union.
By the numbers
Labor Costs and Competitive Pressures
Industry experts and executives argue that Germany's labor costs are significantly higher than those of international rivals. According to a report by Oliver Wyman, labor costs in Germany average $3,307 per vehicle, compared to $769 in Japan and $597 in China. Ferdinand Dudenhöffer, director of the Center for Automotive Research, estimates that moving to a 40-hour workweek would reduce personnel costs by 13%. However, union leaders contend that the industry's struggles stem from weak demand and underutilized factories rather than labor hours. Christiane Benner, head of IG Metall, stated that workers have already accepted significant wage concessions and that longer hours will not increase car sales.
Structural Challenges Beyond Labor
Analysts suggest that while labor costs are a factor, they are not the sole cause of the sector's decline. Stefan Bratzel of the Center of Automotive Management noted that increasing working hours will not resolve the technological race against competitors. He emphasized that German manufacturers must focus on delivering affordable electric vehicles, investing in software and AI, and improving overall manufacturing efficiency. Experts also identified broader structural needs, including lower energy costs, improved logistics infrastructure, and more favorable tax conditions, to restore Germany's competitiveness as a production hub.
Timeline
- 2018The German automotive industry employed approximately 830,000 people.
- September 21IG Metall is holding nationwide demonstrations against job cuts.
- 2030Experts project industry employment will fall to 500,000.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Deutsche Welle Business.
