175,000 workers confront Germany’s auto cuts

IG Metall, Germany's dominant industrial union, said about 175,000 workers walked off factory floors on 21 September in roughly 280 coordinated actions at Volkswagen, BMW, Mercedes-Benz, Bosch and MAN sites (IG Metall). The slogan was "Zukunft statt Kahlschlag": a future instead of sweeping cuts. Workers are not objecting to change. They are objecting to bearing most of the cost while the companies cutting jobs have not shown they can build the electric cars and software needed to fill the factories that remain.

The cuts behind the protests

Volkswagen's supervisory board recently approved a plan to cut roughly 50,000 more positions worldwide (Tagesschau, ZDF). That comes on top of more than 35,000 already agreed at the core VW brand through 2030. The combined figure sometimes reported as "up to 100,000" mixes old and new plans. BMW has agreed about 8,000 reductions worldwide by end-2027, with more than half expected in Germany (ZEIT). Bosch's German mobility division is cutting about 22,000 through 2030 (Merkur).

VW's finances explain the urgency. In 2025, the group earned €8.9 billion in operating profit (the money left from sales after running costs) on €321.9 billion of revenue (Volkswagen Group, CNBC). For 2026, VW expects that margin to fall to about 1%, partly because of a €6 billion write-down (an accounting reduction in the value of its Porsche stake) and deepening weakness in China (To Brief). Weaker earnings shrink VW's room for error as it pours cash into developing electric models and retooling factories.

Why capacity is the core problem

Europe's new-car market remains roughly 18–20% below 2019 levels (ACEA). Fewer cars sold means factories sit partly idle. Fixed costs like equipment, heating and maintenance get spread across fewer vehicles, making each one more expensive to produce. VW says its plants can build more than 500,000 vehicles above expected demand (Volkswagen Group). Closing that gap requires either selling more cars or shutting capacity. So far, the plans lean heavily on shrinking.

The contraction runs through Europe's integrated supply chain. CLEPA, the European automotive suppliers' association, counted 104,000 announced supplier job losses in 2024–25 against roughly 7,000 new positions (CLEPA). Eurofound found a similarly large restructuring pipeline of about 106,000 jobs across Europe in the same period (Eurofound). These figures overlap and use different scopes, but both show announced cuts running far ahead of announced hiring.

Some investment is moving east. Škoda's Mladá Boleslav plant in Czechia spent €205 million on a battery hall producing systems for multiple VW brands (ČT24). But new electric-vehicle investment does not automatically mean more jobs. Czech automotive employment still fell from about 143,000 in 2021 to 137,000 in 2025 (E15), because suppliers making combustion-engine parts lose orders even when assembly plants win contracts for electric models.

Who absorbs the cost

Germany's restructuring relies on negotiated company agreements. The tools include voluntary severance, phased retirement and Kurzarbeit (short-time work, where employers cut hours and the state replaces part of lost pay). Each instrument divides the bill differently. Under Kurzarbeit, workers lose some income, employers save wage costs, and social-insurance funds cover the gap. Mercedes recorded about 5,500 voluntary departures in a single year (n-tv). The common thread: workers' pay and job security absorb the largest immediate shock.

The companies' case for cutting has real force. Unused capacity is expensive, the shift to electric drivetrains needs fewer assembly workers, and Chinese competitors are gaining market share. Some reduction in European production capacity is hard to avoid given how much the market has shrunk.

But capacity reduction is a response to weak sales, not a strategy for winning them back. VW's ID.3, its first mass-market electric car, arrived years behind schedule. Its in-house software unit Cariad burned through billions before being restructured. The current plans can reduce payrolls and unused capacity. They do not show how Germany's carmakers will produce competitive electric models quickly enough to fill the factories that remain.