Parts supplier cuts thousands of jobs as problems with Germany’s auto industry deepen

• Thousands more jobs are at risk in Germany’s struggling auto industry.
• Parts supplier Schaeffler said it would cut thousands of jobs, resulting in a net reduction of about 3,700 people.
• Union officials said Volkswagen plans to close factories in Germany for the first time.

Germany’s auto industry is under intense pressure – and now thousands of jobs are set to be lost at a key company in the supply chain.

Auto parts supplier Schaeffler said on Tuesday it would cut about 4,700 jobs across Europe and close two of its 10 plants in Germany. The move comes a week after union officials said Volkswagen I plan to close factories in its domestic market for the first time.

Schaeffler, which supplies parts to companies such as VW, BMW and Mercedes-Benz, said it would cut about 2,800 jobs in Germany as part of efforts to save 290 million euros ($316 million) a year by 2029.

According to the company, the relocation of some production means that the net number of job losses will be about 3,700 people.

Schaeffler CEO Klaus Rosenfeld said in a press release that these steps are necessary to protect the group’s competitiveness in the long term.

Net profit for the nine months to September 30 fell almost 40% to 250 million euros compared with the same period last year. Shares fell nearly 6% in Frankfurt.

Schaeffler’s problems add to the turmoil facing Germany’s auto industry, a vital part of Europe’s largest economy.

Volkswagen is considering closing as many as three factories and cutting thousands of jobs, a senior company union official said after the company issued two profit warnings in three months.

Rivals Mercedes and BMW also warned of profits as sales fell. Mercedes says it will push for ‘cost improvements’ across its business after electric vehicle sales fell 31% in the third quarter from a year earlier.

Automakers and suppliers are struggling Declining demand for electric vehicles in Europe even when they pour billions transition from cars with internal combustion engines.

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Companies such as Mercedes, BMW and VW also faces a growing crisis in Chinawhile all three reported falling sales in the world’s largest auto market.

European giants are coming under pressure from Chinese electric vehicle companies including BYD and Zeekr, which are gaining market share from foreign firms.

Many of these companies are now expanding their operations in Europe, despite EU tariffs on imports of Chinese electric vehicles. BYD announced plans to withdraw its Ultra-cheap Seagull hatchback to hit the continent next year and builds factories in Hungary and Türkiye.

Scheffler declined to comment.