Automotive News Europe — 2024-02-21
Automotive Industry
Suppliers will continue to have a harder time than automakers in the coming years, especially as the trend towards insourcing will accelerate among automakers.
One in four jobs in the German automotive supply industry could be lost by the end of the decade during the shift to electrification, industry experts predict.
Suppliers employ about 270,000 people in Germany at present. This could fall to 200,000 by 2030, said Frank Schwope, lecturer in automotive economics at the Hanover University of Applied Sciences,
There has been an increasing amount of dire news regarding job cuts across the automotive supply industry in recent weeks, with Robert Bosch. Continental and ZF Friedrichshafen announcing or considering large-scale lay offs.
"The approximately 310,000 employees in 2018 and 2019 are a thing of the past," Schwope told Automotive News Europe sister publication Automobilwoche.
Schwope expects a further decline. "The number of employees in Germany is also likely to fall further due to the transformation to e-mobility," he said.
Suppliers will continue to have a harder time than automakers in the coming years, especially as the trend towards insourcing will accelerate among automakers.
"Even if new jobs are created in areas such as battery development or battery production, these will not be able to compensate for the loss of other jobs," Schwope said.
For Manuel Kallweit, chief economist at the German Association of the Automotive Industry (VDA), the announcements on job cuts are not unexpected in view of the transformation gripping the automotive industry.
"I would even have imagined them to be a little more pronounced in this upheaval," he said. "That shows companies want to keep jobs here in Germany."
He said the job cuts announced by the suppliers would be handled in a socially responsible manner and employees would be offered other positions in the companies.
"Those affected will not become unemployed to the extent that jobs are cut," he said. "There is still a shortage of skilled workers, which will not get any smaller in the coming years."
Jobs transferred, not lost
Kallweit said if an employee from an automotive supplier moves to a battery manufacturer, they are statistically assigned to the electrical industry.
"The situation is similar when an employee moves to a semiconductor manufacturer," he said. "They are then no longer automatically counted as traditional automotive suppliers, but they do still manufacture components for vehicles."
Kallweit said employment in the entire automotive industry in Germany fell by 6% between 2019 and 2023. "The percentage decline was somewhat greater among suppliers. However, the decline in car production was significantly greater," he said.
In 2023, 4.1m cars were produced in Germany, compared to 4.7m in 2019 -- a drop of around 12%.
At the peak of domestic production in 2016, 5.7m vehicles were still being built in Germany. Since then, however, the number of people employed in the automotive industry has only fallen by around 30,000 to around 780,000.
Small suppliers at risk
"In view of the significant decline in production and the transformation, the employment effects could have been much more significant," Kallweit said.
He said it is particularly important to keep an eye on small and medium-sized companies.
"If they retrain an employee to become a software engineer, there is a risk that the employee will then look for a job with a larger, more solvent employer and the medium-sized company will be stuck with the costs," he said.
"Smaller companies cannot afford this. Such companies must be given more support in the qualification and retraining of employees," Kallweit said.