The country’s automakers are cutting production amid high energy costs, U.S. tariffs and Chinese competition. Thousands of auto workers across Germany have staged protests demanding protection for jobs and factories after Volkswagen announced plans to cut 100,000 jobs. Employees at Volkswagen, Mercedes-Benz, BMW, Audi, Porsche and more suppliers are taking part in large-scale actions on Monday.
Germany’s largest industrial union, IG Metall, has warned that the country’s automotive industry is “facing the risk of total collapse” as it grapples with high energy costs following reduced Russian oil and gas imports, US tariffs, and growing competition from China. “We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for Volkswagen Metal’s key jobs among Volkswagen Metal’s key workers.”
Wolfsburg. Volkswagen’s planned cuts include about 50,000 previously announced cuts across its brands and another 50,000 under a new agreement. The company also cut its 2026 operating-margin forecast on Friday by no more than 1%, citing weakness in China, restructuring costs and problems at Porsche. Other German carmakers are also scaling back. BMW is cutting about 8,000 jobs, while Mercedes-Benz is reducing production at home and expanding capacity in cheaper Hungary.
Volkswagen ended car production at its Dresden plant in December, marking the first closure of a car factory in Germany in the company’s 90-year history. The automaker also fell on the Euro Stoxx 50 for the first time in 15 years, with its shares down more than 75% from their 2021 high. By contrast, shares in German defense giant Rheinmetall have risen more than 1,100% since the start of 2022 as Berlin ramps up military spending.
Parts of the automotive sector are also turning to defense. Volkswagen’s Osnabrück plant, where car production will end next year, is set to shift to military manufacturing, with Israeli arms maker Rafael to produce air-defense systems and components. Mercedes-Benz has also explored opportunities in the sector. Germany has budgeted €108.2 billion ($124 billion) for defense this year, with spending set to rise further under Chancellor Friedrich Merz’s push to build what he calls Europe’s strongest conventional army.
Moscow has criticized the buildup. Russian President Vladimir Putin said in June that NATO had moved beyond supporting Ukraine and was now “openly” discussing preparations for war with Russia while increasing military budgets. You can share this story on social media: Follow RT on