**Title: German Industry Faces Job Losses and Competitiveness Challenges, Warns Business Lobby**
Germany's industrial sector is experiencing significant job losses and a decline in competitiveness, according to Tanja Goenner, chief of the Federation of German Industries (BDI). In a recent interview with the news agency dpa, Goenner described the situation as “critical,” highlighting the urgent need for action to address the ongoing challenges facing the industry.
The BDI, which represents approximately 39 industrial groups and over 100,000 companies employing more than 8 million people, serves as a key voice for Germany’s industrial core. Goenner reported that the nation is losing around 15,000 industrial jobs each month, attributing this trend to structural weaknesses within the economy as well as external geopolitical pressures.
Goenner specifically pointed to market distortions caused by Chinese exports and U.S. tariff policies, which she claims are placing considerable strain on domestic firms. She expressed concern that years of structural issues and increasing economic burdens in Germany and across Europe have further eroded the business environment.
Despite these challenges, Goenner emphasized that the potential for further deindustrialization could be mitigated through investments in new technologies, particularly artificial intelligence. She urged that political decisions in Germany and Europe should be evaluated based on their contribution to enhancing competitiveness.
The BDI's assessment aligns with recent data from Germany’s Federal Employment Agency, which reported a loss of 177,000 manufacturing jobs over the past year. The automotive, machinery, and metal sectors have been particularly hard hit. Additionally, around two-thirds of applications for short-term work benefits are coming from the industrial sector, indicating that many manufacturers are struggling to maintain full employment without government support.
A study conducted by the German Economic Institute (IW) and the Bertelsmann Foundation revealed that industrial employment has fallen to its lowest level in a decade. This decline has been exacerbated by retiring workers not being replaced, alongside factory closures and mass layoffs. Major companies are also announcing significant job cuts: Volkswagen, Germany's largest automaker, has indicated it may reduce its workforce by up to 100,000 globally, while auto supplier ZF plans to eliminate 14,000 positions by 2028. Bosch has also announced intentions to cut more than 20,000 jobs by 2030. Consulting firm Horvath estimates that an additional 100,000 industrial jobs could vanish this year, particularly in automotive manufacturing, mechanical engineering, and construction.
Historically regarded as Europe's industrial powerhouse, Germany has faced stagnant growth in recent years. The economy contracted in both 2023 and 2024, marking the first consecutive annual decline in over two decades, with a forecasted growth rate of just 0.5% for this year. Weak corporate investment and a surge in business insolvencies, which reached a 20-year high in the second quarter of 2026, further illustrate the challenges facing the industrial sector. Prominent manufacturers such as BASF, Bosch, and Volkswagen have closed factories since 2022, reflecting the broader downturn.
Analysts have linked the industrial decline to the permanent loss of affordable Russian gas following sanctions related to the Ukraine conflict. Germany had relied on Russia for over half of its natural gas supply, but the self-imposed embargo has forced the country to seek more expensive liquefied natural gas (LNG) imports and pipeline gas from other European nations, resulting in significantly higher energy costs. Chancellor Friedrich Merz recently acknowledged that the energy crisis has largely stemmed from the loss of Russian gas supplies.
The ongoing geopolitical tensions, including the U.S. conflict with Iran and the associated instability in the Strait of Hormuz, have further exacerbated the situation. Reports indicate that Germany is now paying five times more for imported gas compared to the period prior to the cessation of long-term contracts with Russia.
In response to the sanctions, Russia has criticized Western measures, particularly those targeting energy, as illegal and counterproductive. Moscow has expressed readiness to resume gas deliveries to Germany through the undamaged sections of the Nord Stream pipeline, but has yet to receive a response from Berlin. The European Union has ruled out a return to Russian gas imports, committing instead to a plan to eliminate all Russian gas supplies by 2027.
As Germany grapples with these multifaceted challenges, the future of its industrial sector remains uncertain, with calls for strategic investments and policy reforms becoming increasingly urgent.