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How the German economy went from pole position to the bottom

Black series in the land of “Das Auto”. At the chain, the big names of the former flourishing showcase of “made in Germany” are announcing drastic restructuring plans. Volkswagen, Mercedes, Audi… the symbols of the gleaming economy of the “golden decade” (2010-2020), during which Germany won the title of world export champion, are slipping in the sluggish economy. The crisis does not spare foreign manufacturers. Last week, Ford announced the loss of 4,000 jobs in Europe, including 2,900 at the historic Cologne plant.

“Towards an industrial catastrophe”

“This is the fourth or fifth time in a row that we are faced with restructuring,” commented, groggily, staff representative Benjamin Grushka. The Ford site in Saarlouis is also paying the price for drastic staff cuts. “We are going to go from 7,000 employees in 2018 to 1,000 next year,” laments cross-border worker Cédric Moltini, IG Metall union representative, on the phone. “We are heading towards an industrial catastrophe because the subcontractors in the industrial park around the factory are also cutting jobs. Others give up. »

In its fall, the automotive sector drags down the fabric of equipment manufacturers. After Schaeffler and ZF, it is Bosch's turn to announce large-scale job cuts, including 4,000 in Germany. All cite the same reasons: too high cost of energy and labor, unfair competition from China, low digitalization and lack of investment.

A valid diagnosis for the German economy as a whole: the country is heading towards its second consecutive year of recession, trailing industrial countries. The chemist Bayer and the steelmaker ThyssenKrupp are also feeling the full brunt of the crisis. In September, the number of business bankruptcies exploded: +22% compared to September.

Fears of deindustrialization and unemployment

In the world's third largest economy, the dropout is awakening fears of deindustrialization and mass unemployment – still contained at 6%. According to an opinion study by the Friedrich Ebert Foundation, 85% of Germans feel that future generations will be worse off than they are. “Faced with this world in upheaval, we turn our backs in our family cocoon,” analyzes sociologist Stephan Grünewald, director of the Rheingold Institute. While Germans are very optimistic in their private lives – 87% say so in our studies – only 23% of them are confident about the country's economic situation. » Among them, Matthis Menzel, boss of a family SME in the northern suburbs of Berlin manufacturing electric motors for industry. “Our order books are full for the first half of 2025, two-thirds of which are intended for export,” he comments. An outlook darkened in the medium term by a war on customs duties initiated by the United States and China. Donald Trump has made the country of his ancestors a “bete noire”, whose products he threatens to tax. However, recalls economist Ferdinand Fichtner, “Germany's GDP depends for 40% on its exports, much more than any other major economy”.

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