More German Jobs Lost to Shrinking Output of Combustion Engines than Employees Retiring

In the coming years, the number of German automotive jobs eliminated as the output of combustion engines shrinks will be higher than the number of employees retiring from the industry. This is the finding of a study conducted by the ifo Institute on behalf of the German Association of the Automotive Industry (VDA). “Developments in production figures are already showing us that very different parts are needed for electric cars than for combustion engines. However, this transformation has yet to manifest to the same degree in headcount,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.

“The transition to electromobility is a major challenge, especially for automotive suppliers, where medium-sized companies are dominant. It’s important to maintain highly skilled jobs in the remaining production of combustion engines and in electric vehicles without putting the brakes on structural change,” says ifo President Clemens Fuest.

Falck adds: “The transformation that can be expected in headcount won’t be fully cushioned by the retirement of the baby boomers. Since companies are already aware of this gap, they have the opportunity to take appropriate measures in good time, such as retraining and further training.”

The ifo Institute estimates that around 75,000 production workers in the German automotive industry will retire by 2025, around 39,000 of them currently working directly in vehicle manufacturing and the rest in parts manufacturing. But if by 2025 the production of cars powered by combustion engines declines to the extent foreseen under current emissions regulations, then the switch to electric motors will affect at least 178,000 employees; i.e., workers who manufacture product groups that depend directly or indirectly on the combustion engine, with 137,000 of them employed directly by the automotive industry. By 2030, 147,000 production employees will retire, about 73,000 of them from vehicle manufacturing; but there are currently at least 215,000 workers who manufacture products related to the combustion engine, 165,000 of them employed directly by the automotive industry.

The value of product groups directly affected by the transformation to electromobility already fell by more than EUR 22 billion between 2015 and 2019, a drop of some 13 percent. Headcount for these products fell by only some 2 percent, or 8,000 employees. “Maintaining parallel production structures still called for a lot of personnel,” Falck explains.