Mahle cuts 1,000 jobs in Stuttgart: austerity measures hit auto suppliers!

Mahle cuts 1,000 jobs in Stuttgart: austerity measures hit auto suppliers!

The automotive industry in Germany is currently under considerable pressure. In this context, the supplier Mahle from Stuttgart has announced that it will cut around 1,000 jobs in administration and development. This news, which CEO Arnd Franz said in a conversation with “Stuttgarter Zeitung” and the “Stuttgart News” announced, the city of Stuttgart is hit hardest.

These savings measures, which should take effect next year, aim to save 150 million euros annually. The distribution of savings is influenced by material costs and personnel costs, with two thirds of the savings coming directly from personnel costs. A third of the savings are realized through material costs.

Background to the job cuts

The reasons for the drastic measure are complex. The automotive and supplier industry is struggling with a weak market situation that is increasingly being shaped by international competitors and new technologies. The “combustion engine shutdown” and the high US tariffs have further exacerbated the situation ZDF reported. In addition, competition with China is increasing and other market participants are putting companies under pressure.

In July, Mahle had already cut 600 jobs in Germany, which illustrates the severity of the situation. At the end of 2022, the company still had 10,000 employees in Germany and over 67,000 worldwide. In order to master the coming challenge, Mahle would like to implement the job cuts through severance and early retirement programs.

The entire industry is suffering

The Mahle example is not isolated. In 2022, almost 19,000 employees lost their jobs in the German auto industry. The number of employees fell to over 761,000, while sales fell by five percent to 536 billion euros. International competitors also seem to be putting a lot of pressure on German manufacturers. It is believed that relocating production to countries with lower costs, such as the USA or China, could further stimulate job losses in Germany.

High investments in electromobility, which is seen as a future perspective, have not yet brought the hoped-for successes. This is leading to numerous manufacturers and suppliers, including Schaeffler, announcing cuts. Schaeffler is planning to cut 4,700 jobs across Europe, including 2,800 in Germany alone, which makes the situation even more critical.

Many companies are at a crossroads. The current uncertainty in the automotive industry shows that the challenge is not just a temporary phenomenon, but potentially the beginning of a profound change in the industry. The coming months can be decisive for how the sector and therefore many jobs will develop.

For the affected employees at the automotive supplier Mahle and throughout the industry, it will be crucial how the companies respond to the challenges of the time. Is the transition to new technologies possible in a timely and sustainable manner, or will job cuts become the new normal?