If the big manufacturers like VW wobble, it is also a problem for the suppliers. Schaeffler wants to cut thousands of jobs – and that is unlikely to be the end of it for a long time.
The emergency in the automotive industry is spreading further: Following the crisis reports from Volkswagen, the automotive supplier Schaeffler has now announced that it will cut several thousand jobs.
“If you delay structural adjustments – you see this with others – you are later forced to take radical measures,” Schaeffler CEO Klaus Rosenfeld told the German Press Agency. A total of 4,700 jobs are to be cut in Europe, including 2,800 in Germany. That’s 3.1 percent of global jobs. By relocating abroad, the net reduction will ultimately amount to 3,700 jobs. Read more about this here.
Schaeffler cites competition from China and the slow transition to electric cars as the main problems. The company is by no means alone with these challenges. The bad news from the industry is likely to continue.
This is bad news for the industry, but also for Germany and its economic viability as a whole. According to the Association of the Automotive Industry (VDA), 273,500 people were employed in the German supplier industry in 2023.
In terms of sales, Bosch is the largest supplier, followed by ZF Friedrichshafen and Continental. Schaeffler, for its part, had swallowed up the electric drive specialist Vitesco from Regensburg just a few weeks ago and had thus become one of the world's ten largest companies in the supply industry with a total of around 120,000 employees. Also well-known brands, but significantly smaller, are Mahle, Brose and Eberspächer. They are all struggling with the challenges of transformation.
After all, Germany was considered a combustion country for decades and was celebrated and envied worldwide for its technology. But electric drives require different production processes and therefore extensive changes within the companies. There are also two trends: The demand for electric cars is significantly higher in other countries than in Germany, and automobile companies are increasingly manufacturing in the sales countries.
The federal government has announced a clear goal of having a total of 15 million electric cars on German roads by 2030, but that is still a long way off. While global sales of electric cars set a record in September with 1.7 million vehicles sold (including plug-in hybrids), the figures for Germany looked significantly worse. In October, 35,491 electric cars were newly registered in Germany. This accounts for 15.6 percent of registered cars and is slightly better than in September, but still 4.9 percent less than last year. Overall, there are still fewer than two million registered electric cars in Germany.
A difficult situation for German manufacturers and their suppliers. On the one hand, they have to prepare for the production of electric cars. As a result, some jobs have already been cut. Unlike conventional combustion engines, electric cars eliminate the complex parts for the engine, transmission and exhaust system, including exhaust gas purification, and therefore require fewer people in the production chain. At the same time, however, the change is often very expensive.
On the other hand, demand has not yet picked up to the extent that was forecast for a long time. This also means that many investments have not yet paid off and built-up capacities are not being used. Into this mix come the much cheaper electric cars from China, which are heavily subsidized by the state, which put additional pressure on the industry.
This has serious consequences: The management consultancy Horváth had already asked 50 automotive suppliers, including 35 German companies, about their future plans in the second quarter. 60 percent of German companies stated that they were aiming for moderate job cuts in order to reduce costs.
The first shocking reports didn't take long to arrive. Supplier ZF Friedrichshafen announced in the summer that it planned to cut 11,000 to 14,000 jobs over the next four years. Bosch was already talking about 7,000 job cuts months ago. Last week, CEO Stefan Hartung told the “Tagesspiegel” that he “cannot rule out the possibility that we will have to further adjust personnel capacities.” Around 5,000 jobs have been cut and saved at Continental since 2023, and more than 7,000 more jobs are expected to be cut by 2028. Schaeffler now joins this list.
The direction seems clear, because in 2018 there were still 311,000 employees working in the supply industry; currently there are still around 270,000. Industry observers expect the number to continue to fall to around 200,000 by the end of the decade.
