German industry bleeding jobs – business lobby

Germany is rapidly losing industrial jobs and competitiveness, Federation of German Industries (BDI) chief Tanja Goenner has warned, describing the situation as “critical.”

The BDI, Germany’s main industry association, represents around 39 industrial groups and more than 100,000 companies employing over 8 million people, making it the voice of Germany’s industrial core.

In an interview with the news agency dpa released on Saturday, Goenner said Germany’s industrial sector is losing around 15,000 jobs every month, blaming structural weaknesses and external geopolitical pressures.

“The situation in industry is critical,” she said, adding that “Germany has lost ground in terms of competitiveness” as a business and manufacturing hub.

Goenner pointed to growing market distortions from Chinese exports and US tariff policies, saying they are weighing heavily on domestic firms. She also argued that years of structural weaknesses and mounting economic burdens in Germany and across Europe had undermined the business environment.

She said further deindustrialization could still be avoided by investing in new technologies such as AI but stressed that political decisions in Germany and across Europe should be judged by a single standard: “Does it contribute to competitiveness?”

The BDI estimates are broadly in line with the latest figures from Germany’s Federal Employment Agency, which show 177,000 manufacturing jobs were lost over the past 12 months, led by declines in the automotive, machinery, and metal sectors. Around two-thirds of applications for short-term work benefits also come from industry, indicating many manufacturers cannot keep workers fully employed without state support.

A recent study by the German Economic Institute (IW) and the Bertelsmann Foundation found industrial employment had fallen to its lowest level in a decade, as retiring workers go unreplaced alongside factory closures and mass layoffs.

Volkswagen, the country’s largest automaker, recently signaled up to 100,000 job cuts worldwide. Auto supplier ZF plans to eliminate 14,000 positions by 2028, while Bosch intends to cut more than 20,000 jobs by 2030. Consulting firm Horvath estimates another 100,000 industrial jobs could disappear this year, with cuts expected across automotive manufacturing, mechanical engineering, and construction.

German energy woes

Once Europe’s industrial powerhouse, Germany has struggled with near-zero growth for years. The economy contracted in both 2023 and 2024, its first back-to-back annual decline in more than two decades, and is forecast to grow by just 0.5% this year. Corporate investment remains weak, while business insolvencies reached their highest level in 20 years in the second quarter of 2026. BASF, Bosch, Volkswagen, and more than a dozen other German manufacturers have closed factories since 2022.

Many analysts link the decline to the permanent loss of cheap Russian gas following Ukraine-related sanctions, which they say fundamentally reshaped Germany’s industrial cost structure. For decades, Germany relied on Russia for more than half of its natural gas, but the self-imposed embargo forced it to replace those supplies with more expensive LNG imports and pipeline gas from European neighbors, locking in significantly higher energy costs. Last week, Chancellor Friedrich Merz acknowledged that the energy crisis was largely caused by “the lack of Russian gas.”

The US war on Iran and the de facto closure of the Strait of Hormuz, which have rattled already volatile global energy markets this year, have further worsened the situation. Earlier this week, Berliner Zeitung estimated Germany is now paying five times more for imported gas than before abandoning its long-term Russian supply contracts.

Moscow has slammed the Western sanctions, particularly those targeting energy, as illegal and self-defeating. Russia has said it is ready to resume gas deliveries to Germany through the undamaged part of the Nord Stream pipeline following the 2022 sabotage but has received no response from Berlin. The EU earlier ruled out returning to Russian gas and pledged to stick to its plan to end all Russian gas imports by 2027.