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Urgent action is required if Germany, Europe’s former industrial powerhouse, is to overcome its economic turmoil and prevent the deindustrialisation that has already seen thousands of job cuts, the deputy chief of the country’s largest trade union has warned.
IG Metall represents 2.2 million workers from sectors including the car, machinery, steel, and electronics industries. Multiple firms have announced job cuts over the last few months, including Germany’s largest carmaker Volkswagen, largest steelmaker ThyssenKrupp and several automotive suppliers.
Jürgen Kerner, the union’s deputy leader, told Euractiv that the EU and the incoming government “can still stop the job losses” with “concerted action”.
What follows is an edited transcript.
EURACTIV: Your union has repeatedly warned of the arrival of deindustrialisation. But with the many thousands of job cuts that we’ve seen over the last years and months, has deindustrialisation not already arrived?
KERNER: We currently have a demand crisis and a crisis in terms of the industrial transformation. From our point of view, however, we still have the opportunity to counteract this. We can still stop the job losses that have been taking place in energy-intensive industries for three years, for example. We can and must work on increasing the share of industry in Germany’s GDP again. But this requires concerted action on the part of politicians, as well as responsible behaviour on the part of employers.
Is the industrial crisis in Germany deeper than in the rest of Europe?
We have a crisis in all industrialised countries in Europe, but Germany has one of the highest shares of industry. The industries are all internationally interlinked, so when German industry weakens, it runs like a ribbon through Central Europe, from East to West. But the challenges are the same everywhere: the markets are no longer as open as they used to be – think ‘America First’ and industrial policy in China – and high energy costs are not just a burden on Germany; other European countries are also facing this.
Economists say it is a ‘natural’ part of economic development that there’s a shift from industry to services.
We have to recognise that deindustrialisation, for example in America or England, has not led to society becoming richer, but rather that many people are employed in services from which they cannot make a living. The proportion of highly qualified services is not sufficient to replace industrial jobs. As a trade union, we have to make it clear that we can’t all make a living from cutting hair.
To counter deindustrialisation, you call for a European ‘local content strategy’. What does that mean?
We see that America and China are completely closing their doors in various technologies and industries. This means that overcapacities are being brought to Europe and there must be a European response to this. We want answers that normal people understand.
Every normal person understands what we are saying: if you want to sell products here in Europe, then there must be a proportion of European production share in these products. We want Chinese cars to also be produced in Europe – and not just final assembly, but also a with a proportion of local suppliers.
Many would say this is not WTO-compliant. But local value creation also has something to do with sustainability, meaning CO2 emissions, and with resilience. Both topics are WTO-compatible. You can also differentiate the proportion between sectors.
What I fundamentally reject is that we allow products to be sold in Europe at dumping prices or produced under poor working conditions and that European production disappears. We need to find solutions now. My impression is that Ursula von der Leyen has also realised that we need this.
Germany has benefitted for decades from producing for other parts of the world. Wouldn’t what you propose endanger the German export model?
The German export model has always stood up to the competition, with good work, high technology but also good social standards. But we simply have to take note of what is happening in America and China. So I don’t think we are endangering anything.
So Trump and China are a role model for you?
No, not at all, because these countries are totally closing themselves off. No one from IG Metall has called for 100% European production. We simply want to make it clear: if you want to be active in the European market, you have to bring a certain amount of production share with you. We can do this without bringing trade, from which we Germans in particular have benefited, to a standstill.
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