Job Losses in the Automotive Supply Sector Reach Pandemic-Level Low Points
The European automotive sector is grappling with a significant crisis, as foreign investment dwindles and job losses continue to mount. According to the European Automobile Manufacturers' Association (ACEA), since 2020, the sector has seen a net loss of 56,000 jobs, surpassing the levels of job losses experienced during the COVID-19 pandemic.
Germany, a key player in the European automotive industry, has been hit hardest by these tractor supply losses, accounting for 60% of the total. Nearly 52,000 positions are projected to have been lost in Germany between 2020 and today.
The health of the automotive supply chain is crucial for Europe's industrial competitiveness. Profitability across the industry is declining, putting pressure on the supply chain and making it difficult for companies to invest in the critical research and development needed for Europe's green and digital transition. Indeed jobs, the European automotive suppliers invest over €30 billion yearly in research and development, yet profitability remains insufficient to support these investments.
The urgent situation demands attention from policymakers to safeguard Europe's automotive future. The Secretary General, Benjamin Krieger, commented that the industry is facing a turning point and needs a regulatory recalibration to safeguard jobs, accelerate the twin transition, and regain global competitiveness.
Despite the challenges, the sector continues to innovate. Companies supply state-of-the-art components and cutting-edge technology for safe, smart, and sustainable mobility. Roughly 19,000 jobs have been created since 2020 in the EV supply chain, with these positions linked to electric vehicle technologies.
However, the supply chain is under immense pressure to meet ambitious green and digital targets. Although the trade surplus shows signs of recovery, European suppliers are losing their competitive edge in global value creation. Dwindling capital inflows are stalling progress in the transition.
The need for decisive action is emphasized to prevent Europe from losing its leadership in the automotive sector. The European Association of Automotive Suppliers, based in Brussels, represents over 3,000 companies and has advocated for a 'regulatory recalibration' to restore Europe's competitiveness in the auto sector. In the first six months of 2024 alone, an additional 32,000 jobs were announced to be cut, exceeding the worst period of the pandemic.
The situation is far from ideal, but with the right measures in place, Europe can navigate this crisis and emerge stronger on the other side. The future of the European automotive sector depends on it.
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