Germany car crisis: Automobile industry continues to suffer with 70,000 jobs at risk –

The car industry in Germany is in declining demand amid it haemorrhaging millions of euros, putting huge pressure on carmakers and suppliers. Bernhard Mattes, outgoing president of the Association of the Automotive Industry (VDA), told German news publication the Welt: “We have to expect that the number of employees in the core workforce will decrease.” He added that for the first time that by the year 2030 a good 70,000 jobs will be lost.

Mr Mattes added that a lot of this was to blame on the prospect of electric cars.

As a result, the number of employees in the car industry as a whole is expected to fall from around 835,000 to around 765,000.

Referring to the economic headwind, Mr Mattes added: ““Suppliers, that all manufacturers have as customers, are feeling this even more.”

He went on to also blame Germany’s politics for the crisis.

Mr Mattes said: “Now it has to be about improving the framework conditions in Germany as an industrial location.”

Speaking of the US and China debacle, he added: “This country can not escape the global location competition.”

The news comes after the downfall of the car industry in Germany has been dubbed the “biggest crisis since the invention of the automobile”.

Last week the owner of Mercedes-Benz announced plans to axe at least 10,000 employees globally, taking the number of jobs losses by German carmakers to almost 40,000 this year as the industry sinks under a massive sales slump.

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It is estimated the German car industry, which directly employs more than 830,000 people and supports a further two million in the wider economy, will be forced to pump around £34billion into battery-powered technologies over the next three years.

Ralf Kalmbach at consultancy Bain & Co, who has spent 32 years advising German carmakers, told the Financial Times: “No one will survive in the form they exist today.”

He said the huge expense of the current transformation from within some of Germany’s biggest carmakers has left the engine of the country’s postwar Wirtschaftswunder, or economic miracle, facing the “biggest crisis since the invention of the automobile” by Karl Benz more than a century ago.

Last month, Daimler chief executive Ola Kallenius warned: “We have seen the first few chapters of the transformation, but this is a book with many chapters.

“We have kind of the worst situation now. We have got to do the heavy lifting in the next three years

The German car giants have been forced to revise sales projections, particularly as a result of the global economic slowdown, increasing trade tensions between the US and China, and continued uncertainty around Brexit.

Additional reporting by Monika Palenberg.


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