BERLIN -- The German supplier industry is on the brink of massive job cuts as a weak economy, high inflation and the move to electrification create the need for savings.
ZF Friedrichshafen, Robert Bosch and Continental are among the country's suppliers looking a staff reductions as the auto industry's rapid transformation to EVs and software-led vehicles increases costs.
ZF, which is highly indebted, could ax up to 12,000 jobs in Germany by 2030, according the supplier's labor representatives.
The supplier is considering a hiring freeze in Germany and moving work to countries with significantly lower wage costs, its works council chairman, Achim Dietrich, told the German media as workers held a protest against job cuts at the company's headquarters in Friedrichshafen, Germany.
Labor representatives fear the highly indebted supplier wants to cut one in four jobs in Germany by 2030, Automotive News Europe sister publication Automobilwoche reported.
A ZF spokesperson said the works council's fears were based on "extreme scenarios" and "outdated assumptions." Chief Human Resources Officer Lea Corzilius said ZF "continues to invest heavily in its German locations."
Bosch, the world's largest automotive supplier, intends to cut 1,200 software jobs, 950 of which will be in Germany. The company pointed to the faltering economy and high inflation caused by increased energy and raw-materials as reasons for the savings.
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Continental plans to cut 5,500 jobs worldwide, including more than 1,000 in Germany, as the number of business areas in the automotive division gets reduced to five from six.
Mechatronics supplier Brose has said it aims to cut personnel costs by 10 percent.
'Just the beginning'
Stefan Bratzel, director of the Center of Automotive Management (CAM) in Bergisch Gladbach, said he was "not really surprised" by the news, as the consequences of the auto industry's rapid transformation are only now becoming apparent.
"I'm afraid this is just the beginning," he said. "In this decade we expect a 20 percent decline in the number of employees at car manufacturers and suppliers in Germany."
Bratzel highlighted the high energy costs and bureaucratic hurdles putting Germany under increasing pressure in international competition.
Frank Schwope, lecturer in automotive economics at FHM Hanover, said he also expects further reports of job cuts at suppliers.
The companies are suffering from lower margins compared to vehicle manufacturers, and automakers' insourcing efforts are also weighing on the industry, he said.
At the IAA Mobility show in Munich in September, Matthias Zink, the head of Schaeffler's automotive business, touted the benefits of automation and AI — technologies that could reduce headcount at suppliers.
