How Long Can Germany Keep Auto Jobs?

October 7, 2009 at 8:00 am

So far, Germany’s auto industry has escaped massive job losses, but major cuts could soon be on the cards.

The recession has caused a dent in global auto sales, but German automakers have avoided mass layoffs. In part, that’s because the German government subsidizes workers whose hours have been trimmed through a program called Kurzarbeit, or “short work.” A successful cash-for-clunkers program, which has just finished, also sheltered the industry.

But how long before Germany’s blue-collar workers head for the unemployment lines? The signs don’t look good. If demand doesn’t return to pre-recession levels soon, many German automakers will likely begin making large layoffs. Analysts reckon up to 10% of the workforce could face the chop, while others will have to learn new skills to cope with the changes to the automotive sector. “Employment in the auto industry in Germany has peaked,” says Ferdinand Dudenhöffer, director of the Center for Automotive Research at the University of Duisburg-Essen. “[Job losses] will come, and workers will have to find possibilities in other industries.”

By M. Herbst, BusinessWeek, September 28, 2009

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Entry filed under: Business Development, European Union, NKITA.

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