It was a piece of news that, perhaps not coincidentally, came out on a Friday afternoon, although news of this kind has become so frequent in Germany that it often covers an entire week. Technology group Bosch plans to cut 5,550 jobs in various sectors worldwide by 2032. 3,800 of these jobs will affect factories and business units in Germany. As the relevant press release stated, Bosch plans to cut:

3,500 jobs in software development for autonomous driving – about half of them in Germany
750 jobs at the Hildesheim plant
1,300 jobs in the steering system sector in Schwebis Gmünd

And here, as happened in the previous days with similar announcements made by major car manufacturers, such as Volkswagen, the subsidiary of Audi, and also Ford, the cuts are related to the dystocia, which is observed in the transition to electric mobility.

Changing market environment

“We need to adapt our structures to the changing market environment and reduce costs in a sustainable way in order to strengthen our competitiveness and position ourselves for the future,” explained Staffan Heltschl, member of the Board of Directors for commercial activities. of the Cross-Domain Computing Solutions division.

The transition to electric vehicles, which depend on analog software, is taking too long overall, which has a direct impact on the start of production and recall rates for vehicle manufacturers. At the same time, the company has to invest large sums in these technological innovations. According to Heltschl, the goal is to make the job cuts “as socially responsible as possible.”

Something similar in terms of absorbing the social consequences has been promised by Volkswagen, which is planning to cut tens of thousands of jobs, without however convincing the workers, who, as they announced on Thursday, are planning strikes through their unions within the first ten days of December. when the truce period agreed with the employer will expire.

Harbinger of social tensions?

Enraged by the company’s announcement, which “constitutes a slap in the face for the workers”, the trade unionists of the Bosch group also declare. As recently as July 2023 the Board had ruled out redundancies until the end of 2027. “But then, in May 2024, it was agreed to lay off a total of around 2,200 workers across four different sectors in Germany. “Just six months later, another 3,800 jobs are going to be cut,” employee representative Frank Sell said, calling this unacceptable.

“The Hildesheim plant has worked hard for many years to transition from products for internal combustion engines to those for future-oriented electrification,” said Stefan Sturmer, chairman of the plant’s works council. “If staff are indeed cut at this location now, that would be a fatal message to all units, which still have this transformation ahead of them,” Sturmer said.

They fell out in the calculations

The problems for the German car industry and the companies that supply it with various components are “double”. On the one hand, the decisions of the political leaders on the transition to electric mobility now seem too hasty. Consumers are cautious, their income remains stagnant and leads them to avoid risks and relatively high costs, such as the purchase of an electric vehicle. Governments have abandoned their initial generosity of “subsidies” as they all struggle with tight budgets, so the market is in steady decline. On the other hand, there are also the structural issues of the German economy, which everyone admits is facing problems of technological delay, but also of incomplete reforms, especially in the fight against bureaucracy.

Anyone who watches pre-election debates is struck by the strange feeling of hearing party representatives accuse each other with arguments reminiscent of those used by German politicians themselves against the countries of the South during the years of the Great Depression.

More general climate of insecurity

All this shows how difficult it will be for the next government to put the German economy back on track and shake off this insecurity that is also reflected in surveys among representatives of the business world. It is no coincidence that large investments, which the Scholz government had tried to make “its flagship”, such as those of Intel and Wolfspeed, both in the semiconductor sector, were canceled or postponed indefinitely, despite the fact that they would be supported by several billions of government subsidy.

The German economy seems to be caught in a chain of succession of bad news, one feeding the other, and the climate is steadily deteriorating. The uncertainty of the pre-election period, the possibility of a government that will not have such a strong majority and of course the overall unstable framework worldwide, worsen the situation even more, causing daily predictions for a permanent stagnation.