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German defence contractor Hensoldt has offered to take on laid off workers at car suppliers Bosch and Continental, as the country’s defence industry sees booming demand in sharp contrast to its struggling automotive sector.
The Bavarian maker of air defence radars is currently in talks with the two automotive suppliers to take on just under 200 employees who are facing redundancy, Hensoldt told the Financial Times.
Following Russia’s invasion of Ukraine, Germany’s booming defence sector has struggled with production capacity constraints in the face of soaring orders, while the country’s automotive suppliers have continued to slash jobs amid low European car demand and cheaper vehicles from Chinese rivals.
Hensoldt has amassed a record order backlog of €6.5bn in the first nine months of 2024 with its shares nearly tripling since early 2022.
Both Bosch and Continental were not immediately available for comment on discussions with Hensoldt.
In June last year, Germany’s largest defence contractor Rheinmetall agreed to take on hundreds of car engineers from Continental to fill its rapidly growing number of vacancies.
The talks between Hensoldt and the car suppliers come as Bosch on Friday said it had shed 11,500 employees in the past year — roughly 3 per cent of its workforce — including 4,400 in Germany.
Further job cuts are expected, as the world’s largest automotive supplier in November warned of up to 5,500 job cuts over the next few years, with nearly three-quarters of redundancies targeted at its home country.
Continental, the German tyremaker looking to spin off its automotive division, this week said it would close four plants in Germany, affecting a further 600 jobs.
The historic strength of German carmakers Volkswagen, BMW and Mercedes-Benz has supported a vast ecosystem of suppliers, many of them small and family-owned.
But as demand for German cars has declined, underscored by VW’s plans to halve its domestic production capacity, suppliers are facing mounting pressure. Consultancy EY estimates that 12,000 jobs were lost last year alone.
“Low volume is never good for an automotive supplier,” said Bosch chief executive Stefan Hartung, as he announced that the private company’s earnings before interest and tax margin fell to 3.5 per cent in 2024, compared with 5.3 per cent in the previous year.
More than 60 per cent of the €90.5bn made in revenues last year came from its automotive business. Bosch also sells consumer electronics, heat pumps as well as technology for manufacturing companies.
Hartung added that Bosch had begun offering support to some of its smaller suppliers, which have struggled to secure financing amid the ongoing restructuring of Germany’s automotive industry.
Job losses at the suppliers are not limited to Germany. Job losses at European car suppliers more than doubled in 2024, totalling more than 30,000, according to the European Association of Automotive Suppliers.
The gloomy outlook for the European automotive industry casts a shadow over plans at Continental to spin off its automotive branch which, with annual sales of €20.3bn and roughly 100,000 employees, makes up about half of its business.
