Germany’s largest union, IG Metall, says the industry must work closely with politicians and workers to overcome what it describes as a deep crisis facing the country’s industrial base.
Pointing to US tariffs, China’s race to catch up with technology and high energy prices resulting from the war in Ukraine, union president Christiane Benner recently warned: “These are already extreme challenges for the German economy. The export model is in danger.”
Benner called for targeted European investments in digitalization and future technologies such as battery production.
She also welcomed moves to ease the planned phase-out of combustion engines by 2035, saying this would give key industries more room to develop better solutions and safeguard key industrial sectors.
“There’s a lot at stake,” Benner said. “Without industry, Germany is a poor country. And if prosperity disappears, we put our democracy in danger.”
Phasing out combustion engines takes time
Despite recent decisions taken in Brussels, the long-term direction of the automotive industry remains electric, Benner stressed.
However, IG Metall supports greater flexibility in drive systems, noting that the use of green steel and renewable fuels could also bring climate benefits.
“It would save us time, especially in the supplier area,” Benner said. “We need this time to retrain workers and manage transformation in a socially responsible way. Businesses now have no excuses. Job security must be the top priority.”
The union leader warned of the loss of skilled workers through early retirement or unemployment.
Instead, employees should be retrained in sectors with growth and labor shortages, including aircraft manufacturing, medical technology and the energy transition. “I don’t just think about defense,” she added.
Many businesses lack strategy
Benner also called for faster and more decisive management within companies.
“In many cases, not much has changed,” she said. “Our works councils note that around half of companies do not have a strategy for the future. What we need are real crisis managers. Instead of strategies, there is too much complaining about the welfare state.”
She urged businesses and trade associations to stop repeatedly criticizing Germany’s welfare system, arguing that politicians had already implemented relief measures, including on energy costs, incentives for electromobility and improved depreciation rules.
“Yes, there is still a lot to do,” Benner acknowledged. “But these signals are not sufficiently appreciated.” According to her, the demands for new social cuts were in reality directed against employees.
“All social cuts and remarks that workers are too lazy or too sick are seen as attacks on the people themselves.”
Warning about unfair competition from China
Benner also warned that competition with China is not fair. Europe, she said, should take a cue from the United States in emphasizing local value creation when attracting non-European businesses.
“We need clear rules on local content,” she said, citing Deutsche Bahn, which receives billions of euros in public funding.
“It should not end up ordering buses from BYD,” she said, referring to recent reports that German Railways was considering buying a small fleet of electric buses from Chinese manufacturer BYD.
Europe, she concluded, must defend itself against unfair competition.
