German car makers’ work councils predict massive job losses

Lines of unemployed during the Great Depresion

Once the Diesel scandal hit Germany it became clear for the work councils of German car makers that fundamental change and job losses are ahead. Lawsuits filed against the manufacturers of Diesel engines, the proposals of Norway or the Netherlands to ban Diesel, and the recent vote by the German Bundesländer  on banning internal combustion engines starting 2030 made it clear that the time of combustion engines is over.

The work council at Mercedes is wondering what is going to happen to 19,000 employees in Untertürkheim? Those are today working on components such as transmissions and combustion engines. Electric motors don’t need that anymore.

If Audi is going to follow through with their announcement that starting 2025 no new combustion engines will be developed, then Ingolstadt expects the loss of 20,000 jobs that won’t be needed anymore.

While an eight cylinder engine is built out of 1,200 parts, an electric motor only needs 17. Only a tenth of employees will be required. That has also ramifications going down the chain. No oil or filter change in an electric car, or fewer parts to maintain mean that you need fewer mechanics and workshops.

Bosch also has huge stakes in the combustion engine technology. In the factory in Feuerbach 7,400 of the 12,000 employees work on combustion engine technology. What are you going to do with them?

Considering that one third of all employees at OEMs and supplier are working on parts for the internal combustion engines, then one can quickly see the potential job losses. Volkswagen would lose close to 200,000 jobs, Daimler 90,000 and BMW 40,000.

Employee numbers at carmakers with and without ICE construction
Number of employees at carmakers. Without building internal combustion engines and switching fully to eletric vehicles, these numbers drop by a third.

The powerful work councils expect a faster switch to electric vehicles than studies suggest. The local head of the labor union IG Metal Roman Zitzelsberger expects that bey 2030 the amount of EVs will count for 20 to 25 percent of all vehicles instead of the ten percent suggested in studies. These discrepancies cane up not least because they didn’t include the most recent developments with countries pushing for banning Diesel cars.

At the same time none of the German car makers has built up their core competencies around EVs. The production of battery cells is outsourced to third parties, most of them located outside Germany. And that’s where those jobs are.

How quickly times are changing can be seen in the development of the discussion since the Diesel scandal became public. While banning Diesel cars a year ago was widely regarded as foolish, and EVs considered as a short-lived fad, the discussions changed to one where cities and states are seriously pushing for banning combustion cars. The past has also shown that technological change can come faster than predicted. Thirteen years is not such a long time, and the first car revolution has shown a similar picture.

And about what are the work council and management of VW (you know, the company that we ‘owe’ the Diesel scandal) fighting? About whether T-shirts for work clothing is still free for employees or not. That’s the moment where it becomes clear why German students on a visit to Silicon Valley said: “We understood, why Tesla will win.

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