German auto supply industry may lose a quarter of its jobs

Auto suppliers employ about 270,000 people in Germany. This could fall to 200,000 by 2030, said Frank Schwope, lecturer in automotive economics at the Hanover University of Applied Sciences.

The dire news regarding job cuts across the auto supply sector has been growing in recent weeks, with Robert Bosch, Continental and ZF Friedrichshafen announcing or considering large-scale layoffs.

"The approximately 310,000 employees in 2018 and 2019 are a thing of the past," Schwope told Automobilwoche, a sibling publication of Automotive News and Rubber News.

Schwope expects further declines.

"The number of employees in Germany is likely to fall further due to the transformation to e-mobility," he said.

French supplier Forvia, a maker of auto interiors with global operations including the United States and Germany, also announced it will cut 10,000 jobs in Europe by 2028.

Continental is axing 7,150 jobs in its automotive division worldwide.

At least 3,200 jobs are likely to be lost at Bosch, most of them in Germany in the combustion engine, automated driving and control units.

ZF, which is highly indebted, could cut up to 12,000 jobs in Germany by 2030, according to the supplier's labor representatives.

Suppliers will continue to have a harder time than auto makers in the coming years, especially as the industry trend toward insourcing accelerates among auto makers.

"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, the 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."

In addition to supplying European auto production, German suppliers are critical for production across North America.

Kallweit said the job cuts announced by the suppliers would be handled in a responsible manner and employees would be offered other positions.

"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."

The data might also be misleading, Kallweit noted. If an auto supplier employee moves to a job in battery manufacturing, for example, that job is statistically in 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 auto industry in Germany fell by 6 percent 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, Germany produced 4.1 million cars compared with 4.7 million in 2019—a drop of around 12 percent.

At the peak of domestic production in 2016, 5.7 million 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.

"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-size 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," Kallweit said. "Such companies must be given more support in the qualification and retraining of employees."