Germany, once Europe’s industrial powerhouse, is facing a serious economic crisis with deindustrialization threatening to disrupt its vital sectors. Thousands of job cuts have already been announced by major companies, including Volkswagen, ThyssenKrupp, and several automotive suppliers.
Jürgen Kerner, deputy leader of IG Metall, the country’s largest trade union representing 2.2 million workers, has issued a stark warning that without urgent action, the country risks further job losses and economic stagnation.
Kerner believes that while the situation is dire, there is still a chance to reverse the trend. He stressed that Germany’s industrial transformation and demand crisis can be countered with coordinated efforts from both the European Union and the incoming government. His comments came after a series of job cuts in energy-intensive industries, a trend that has been ongoing for the past three years.
“We still have the opportunity to stop the job losses that have been occurring in energy-intensive industries. However, to achieve this, we need collective action from politicians and responsible behavior from employers,” Kerner told Euractiv in an exclusive interview.
While other European nations are also grappling with industrial crises, Germany’s situation is particularly concerning. The country has a high proportion of industry within its economy, and its manufacturing sector is deeply interconnected with the rest of Central Europe. When Germany’s industrial base weakens, the effects ripple through neighboring economies.
The challenges, Kerner noted, are not unique to Germany. Rising energy costs and the increasing protectionist policies of both the United States and China have made it harder for European industries to thrive. However, Kerner warned that simply accepting a shift from industry to services—often touted as a natural part of economic development—would not lead to the prosperity many expect.
Drawing comparisons with the deindustrialization seen in the United States and the UK, Kerner emphasized that such a shift does not necessarily result in a wealthier society. “Many people in service jobs are struggling to make a living,” he explained, adding that there are not enough high-skill service jobs to replace the lost industrial employment.
To combat this, IG Metall is advocating for a European “local content strategy” that would demand a minimum share of European production in goods sold on the continent. Kerner argued that both China and the US are effectively closing their doors to foreign competition, and Europe must respond by ensuring that products sold here contribute to local industries.
“Every normal person understands that if you want to sell products in Europe, there should be a European production share in those products,” Kerner said. He highlighted the example of Chinese cars, which he believes should not only be assembled in Europe but should also involve European suppliers in the production process.
While this approach has raised concerns about compliance with World Trade Organization (WTO) rules, Kerner insisted that such a strategy would still align with the WTO, particularly in areas related to sustainability and resilience. The key, he argued, is to prevent the sale of goods produced under poor working conditions or at artificially low prices that could undermine European industries.
Kerner’s vision aims to protect local jobs and ensure sustainable production in Europe. He rejected the notion that this strategy would undermine Germany’s successful export model, which has historically relied on high-quality products and strong social standards. Rather, he believes that adapting to global changes will ensure the long-term viability of Germany’s export-driven economy.
“We’re not advocating for 100% European production,” Kerner said, “but we want to ensure that if you want to be active in the European market, you need to contribute to its production.” He stressed that this approach would not shut down international trade but would ensure that Europe remains competitive while safeguarding local industries and jobs.
As Germany grapples with its industrial challenges, Kerner’s calls for a bold, collective response to the crisis have never been more urgent. If Europe’s industrial future is to be secured, immediate action is needed to safeguard jobs and ensure that local industries can continue to thrive in an increasingly globalized world.
