Germany’s largest union urges joint action to avert industrial crisis

Germany’s largest trade union, IG Metall, says industry must work closely with politicians and employees to overcome what it describes as a profound crisis facing the country’s industrial base.

Pointing to US tariffs, China’s technological race to catch-up and high energy prices resulting from the war in Ukraine, union head Christiane Benner recently warned: “These are already extreme challenges for the German economy. The export model is in danger.”

Benner called for targeted European investment in digitalization and future technologies such as battery production.

She also welcomed moves to soften the planned phase-out of combustion engines by 2035, saying this would give key industries more room to develop better solutions and safeguard industrial core sectors.

“There is a great deal at stake,” Benner said. “Without industry, Germany is a poor country. And if prosperity disappears, we jeopardize our democracy.”

Combustion-engine phase-out needs time

Despite recent decisions in Brussels, the automotive industry’s long-term direction 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 deliver climate benefits.

“This would buy us time, especially in the supplier sector,” Benner said. “We need that time to retrain workers and manage the transformation in a socially responsible way. There are no more excuses for companies now. Job security must be the top priority.”

The union leader warned against losing skilled workers to early retirement or unemployment.

Instead, employees should be retrained for sectors experiencing growth and labour shortages, including aircraft manufacturing, medical technology and the energy transition. “I’m not only thinking of defence,” she added.

Many companies lack a strategy

Benner also called for faster and more decisive management within companies.

“Little has changed in many cases,” she said. “Our works councils report that around half of companies have no strategy for the future. What we need are real crisis managers. Instead of strategies, there is too much whining about the welfare state.”

She urged companies and business associations to stop repeatedly criticizing Germany’s social system, arguing that politicians had already delivered 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 being sufficiently appreciated.” Demands for further social cuts, she said, were effectively directed against employees.

“All social cutbacks and remarks about workers being too lazy or too sick are perceived as attacks on people themselves.”

Warning over unfair competition from China

Benner also warned that competition with China is not fair. Europe, she said, should learn from the US by insisting on local value creation when attracting non-European companies.

“We need clear local-content rules,” she said, citing Deutsche Bahn, which receives billions of euros in public funding.

“It must not end up ordering buses from BYD,” she said referring to recent reports that Germany’s state-run railway plans to buy a small fleet of electric buses from the Chinese manufacturer BYD.

Europe, she concluded, must defend itself against unfair competition.