Because of D and USA

Red alert for domestic automotive suppliers

Concern is growing among domestic suppliers.

(Bild: Magna)

The domestic automotive supplier industry is looking anxiously to Germany and across the Atlantic. The crisis in the German automotive industry coupled with a veritable government crisis and the fear of punitive tariffs in the USA under future President Donald Trump are depressing the mood in this important industry sector.

Well-known representatives in this country include Magna Steyr (Graz), BMW Motoren (Steyr), Pierer Mobility (Wels), AVL List (Graz) and Robert Bosch (Vienna). According to its own figures, the automotive supply industry recently generated an annual production value of around EUR 15 billion and added value of EUR 7.4 billion.

The industry directly accounts for 81,700 jobs and indirectly secures almost 200,000 jobs. 900 companies are wholly or partly active in the sector. And the news from them has not been good recently. The job cuts ranged from industry leader Magna to medium-sized companies such as ZKW in Wieselburg.

BMW in Steyr, the world's largest engine plant in Bavaria, is a showcase plant that politicians like to visit. But here, too, there is a crisis at Group headquarters. At the bottom line, the Group only earned 476 million euros in the third quarter this year, 83.8 percent less than a year ago. The profit margin in the automotive business slumped to 2.3 percent.

Suppliers pay particularly well
The supplier industry is considered to be an above-average paying sector, as can be seen from the annual collective wage negotiations in the metal industry. Just a few weeks ago, the metalworkers signed their collective agreement and received a 4.8 percent pay rise, which is one percent above rolling inflation. The new minimum wage is 2518.43 euros. However, the employers have left themselves a loophole: For companies in a very difficult situation with high personnel costs, the increase may be reduced by 0.75 percent or 1.5 percent.

The discussion about the future of the combustion engine has also had a profound political impact in Austria, with Federal Chancellor Karl Nehammer (ÖVP) repeatedly calling for an "openness to technology". A demand that has also been postulated by motorists' clubs and the interest group eFuel Alliance Austria.

More and more uncertainty factors
In addition to all the uncertainty about the future of engine technology, there is now also the fear of punitive tariffs from the USA and tariffs already announced by the EU for Chinese e-cars. "We are observing such trends with concern," explained Günther Kerle, spokesman for the Austrian automotive importers, recently.

Porsche Holding is doing better than VW
Austria is not only an automotive supplier, it is also home to Porsche Holding in Salzburg, the VW Group's sales channel in Austria and south-eastern Europe. The holding company achieved a record turnover of 29.4 billion euros in 2023. At 747,700 vehicles, new car sales were up 13.9 percent compared to 2022, while 212,400 used cars were sold (up 12 percent). The number of employees rose by three percent globally, with 35,900 people working for the car dealer in 29 countries.

But the Volkswagen Group is also doing well. In mid-September, a massive cost-cutting program was announced and German media reported that up to 30,000 jobs could be under threat.

Competitor Opel and its parent company Stellantis have been undergoing restructuring for a long time, which also had a direct impact on the Vienna-Aspern transmission site. In mid-July, the former flagship plant closed its doors for good. A redundancy plan was implemented for the 300 employees affected and a job center was set up. The last gearbox will be handed over to the Wien Museum on November 26.