The German automotive supplier Bosch is considering significant job cuts in its powertrain division. Bosch is considering cutting up to 1 500 jobs in development, administration, and sales, said a spokeswoman on Monday.

A report in the specialized German magazine Automobilwoche triggered the announcement. The shift of the automotive industry away from combustion engines and toward electric vehicles was cited as the reason for the job cuts. The spokeswoman said that the shift will significantly impact the entire sector in the medium term.

Energy transition

She said the transition to electric vehicles requires a high upfront investment and is accompanied by falling employment requirements. The transition to electric cars also means the need for more complicated drivetrains with complicated gearboxes is diminishing.

A weak global economy, persistent inflation, and negative exchange rate effects exacerbate the company’s situation.

Labor representatives at Bosch are in close contact with the company about any staffing reductions, the spokeswoman added, and the works councils would be involved before any final decisions are made.

The cuts would likely impact workers at Bosch’s facilities in the southwestern German towns of Feuerbach and Schwieberdingen. “We want to focus on the internal placement of associates in other areas, on offering qualification programs for growth areas, but also on early retirement arrangements or voluntary redundancy agreements,” the spokeswoman explained.

Bosch remains committed to the deal reached with labor representatives last summer, which rules out compulsory redundancies for about 80 000 employees in the automotive supply division in Germany until the end of 2027, she concluded.

Abroad

Bosch, named after the founder Robert Bosch, is still a family-controlled business, employing more than 400 000 people all over the world, with almost €90 billion in turnover. The fate of the workers in other countries seems less protected.

In Tienen, Belgium, the Bosch factory that makes wiper blades has already been cutting its workforce for an extended period now. In France, the powertrain division runs an important factory in Rodez (Aveyron), where substantive job cuts were planned (700 of the 1 200 employees) in 2021. Earlier on, more than 2 000 people were employed in Rodez.

The reason? The demise of the diesel car. The specialty of the Rodez plant was the production of diesel injection systems. Today, this activity has been practically outphased.

The hydrogen alternative

In March 2021, Bosch announced that the Rodez site was given the global responsibility of a so-called hydrogen solution. An innovative technique for cooling containers using hydrogen was developed on-site.

Today, the general direction has decided in June of this year to suspend the project for at least a couple of years “because there’s no clear view on the commercial future of the new technology”.

Several meetings between the management and the unions are planned to save the factory. The critical date seems to be 2028. “The Bosch direction has to keep its engagements, says union representative Pascal Raffanael. “We still have four years to find new activities and production possibilities for the site. But for that, the managers have to stick to their former promises.”

Once again, we see a German automotive giant struggling with the consequences of an energy transition that was underestimated and where adequate and appropriate decisions remained absent for a long time.

The switch to electrification is a significant transition requiring much money and new ideas. It seems that the German car industry has been lacking the clairvoyance to act accordingly in the past years. The consequences are becoming apparent every day now.