German Carmakers Propose 40-Hour Workweek Amid Industry Crisis

German car manufacturers are advocating for a shift from a 35-hour workweek to a 40-hour workweek without additional pay, claiming it would enhance competitiveness. Unions oppose this proposal, viewing it as a threat to workers' rights. The automotive sector in Germany is currently facing significant challenges, including high manufacturing costs, US tariffs, increased competition from China, and a transition to electric vehicles. Major companies like Volkswagen, Mercedes-Benz, and BMW have announced plans to reduce production and cut costs. Volkswagen aims to reduce its global workforce by about 15%, equating to approximately 100,000 jobs, by the end of the decade, while BMW plans to cut up to 8,000 jobs, or about 5% of its workforce, by 2027. Auto suppliers such as Bosch and ZF Friedrichshafen are also implementing job reductions due to tough market conditions. Ferdinand Dudenhöffer, director of the Center for Automotive Research (CAR), noted that the industry's employment has decreased from around 830,000 in 2018 to below 700,000 currently, with projections suggesting it could fall to 500,000 by 2030. He emphasized that regaining competitiveness will require measures such as lowering production and energy costs, improving logistics infrastructure, and favorable tax conditions. Labor costs in Germany average $3,307 (€2,882) per vehicle, significantly higher than $769 in Japan and $597 in China, according to a report by consulting firm Oliver Wyman. The 35-hour workweek has been a standard in the automotive industry since the 1980s and 1990s. Unions argue that the issue lies in weak demand and underutilized factories rather than labor hours. IG Metall, a major trade union, is organizing demonstrations at over 200 locations on September 21 to protest job cuts and changes in working conditions. Dudenhöffer stated that moving to a 40-hour workweek could reduce personnel costs by 13%, while Stefan Bratzel from the Center of Automotive Management highlighted that increasing hours without pay would lower labor costs per hour. Experts agree that while improving labor costs is necessary, it will not address the industry's deeper structural issues. Bratzel pointed out that simply increasing working hours will not ensure competitiveness against China. He stressed the need for German manufacturers to innovate in electric vehicles, software, and manufacturing processes. Dudenhöffer reiterated the necessity for reforms to restore competitiveness, warning that the coming years will be challenging if the industry does not adapt to current realities.