A wave of industrial job cuts is setting a gloomy tone in the early stages of Germany’s election campaign, with politicians describing economic conditions as the most challenging they have ever faced for a federal election.
In the month after collapse Chancellor Olaf Scholz’s ill-fated tripartite coalition paved the way for snap elections in February, with some of the country’s biggest employers announcing planned job cuts, including 11,000 at steelmaker Thyssenkrupp, 3,800 at Bosch, the world’s biggest auto parts maker, 2,800 at rival Schaeffler and 2,900 at Ford.
The dismissalsfollowing the threat of Volkswagen’s first German factory closures, it will have a major impact on the election, which is being held as the country suffers its deepest economic downturn since the early 2000s.
“I have rarely experienced such a difficult context as this now,” said Achim Post, a Bundestag member of Scholz’s Social Democratic Party (SPD) in North Rhine-Westphalia, a key industrial region hit by job cuts.
Pointing to a number of industrial cities across the country, Post said: “Every family that works in Duisburg, or Stuttgart, or Leverkusen… . . he looks at himself and asks: ‘will I know at Christmas if I still have work next year?’ The mood is very difficult.”
Record energy prices following Russia’s invasion of Ukraine in 2022, sluggish growth in the eurozone and China’s push to flood European markets with competing products have dealt German industry a triple whammy of challenges. Europe’s largest economy also faces existential questions about whether it will suffer widespread deindustrialization.
German carmakers — long a source of national pride — were among the hardest hit, also hurting thousands of companies that supply them. VW employees began a series of walkouts on Monday as unions at the automaker put up fierce resistance.
However, the challenges go beyond the automotive industry. Chemical giant BASF is one of those that has warned of plans for permanent cuts in its country.
“What we are seeing right now is weakness not just in one sector of the economy, but in the German economy in general,” said Markus Uhl, a Christian Democrat (CDU) lawmaker whose constituency in Saarland is affected. planned cuts at factories belonging to Schaeffler, Bosch, Thyssenkrupp as well as ZF Friedrichshafen, another car supplier.
Saarland, which despite its large industrial base is one of the poorest West German states in terms of GDP per capita, came in at the bottom of a recent national happiness survey.
“It’s an expression of the great uncertainty we see,” he said. “The mood is tense.”
Polls suggest that Uhl’s CDU and its Bavarian sister party the CSU — traditionally seen by voters as the safest pair of hands in the economy — will benefit from the turnaround, with around 33 percent in the polls well ahead of rivals.
Leader of the CDU and candidate for chancellor Friedrich Merz he recognized the anxiety of the workers while also trying to paint a hopeful picture for the future. He noted last week that Germany “still has great strength,” adding: “We know the situation, we have it under control, and yet we are still confident that we can overcome it.”
Scholz’s SPD is trailing in third place with around 15 percent — down sharply from first place with 26 percent in the last election in 2021.
Ursula Münch, director of the Bavaria-based Academy for Political Education, expects the Social Democrats to make amends, describing them as “good activists”. She said the party’s message that the CDU would cut welfare payments to fund support for Ukraine would resonate with some.
But the party will struggle to convince people it can fix the economy, she added. “No one is really convinced that they can succeed in that regard.”
Münch warned that the frightening climate posed a threat to all mainstream parties at a time when the far-right Alternative for Germany (AfD), which is second in the polls, and a newcomer, the far-left Alliance Sahra Wagenknecht (BSW), claimed successes in some recent regional elections.
“The question is whether the CDU/CSU can solve that fear or whether a large number of voters will go to the AfD or the BSW,” she said.
Rafael Kriege, chairman of the CDU in the western city of Pulheim, where some families will be affected by Ford’s closure in nearby Cologne, admitted that it would not be just Scholz’s failed coalition that would face tough questions. His own party led the country for 16 years until 2021 former chancellor Angela Merkel.
“Of course we will face why we didn’t support the car industry enough,” he said.
The job market is not all gloomy. Although economists expect the steady ticking of job losses to continue into 2025, paradoxically, the total number of employed people has risen to a record high of more than 46 million. Some high-tech sectors continue to create new jobs, and the country suffers from acute labor shortages in areas such as childcare, health care and education.
Still, Stefanie Walter, a professor of international relations and political economy at the University of Zurich, said the often poorly paid jobs in the service sector may not help those who lose high-skilled, well-paid industrial roles.
She said those affected by production cuts would be deprived not only of income and job security, but would also suffer a “loss of recognition and status” – a factor that could fuel support for populist parties that often successfully exploit such sentiments.
Concerns about the German economy have been heightened by the conflict in Ukraine and fears of a trade war under Donald Trump, creating “a level of uncertainty in global politics that I can’t (ever) remember,” Walter said.
Experts warn that the deluge of grim news is unlikely to abate as Election Day approaches on February 23. “More bad headlines are likely to emerge,” said Robin Winkler, chief German economist at Deutsche Bank. “We are probably only halfway through adapting to the labor market.”
Additional reporting by Guy Chazan and Ben Hall in Berlin
Data visualization by Jonathan Vincent
