The last day of work was emotional. When the only steelworks in Hesse closed its doors forever at the end of October, many employees were sad and disappointed. This is understandable, because the breakup of the traditional company Buderus Edelstahl marks the end of 300 years of industrial history in Wetzlar. Many of the employees who recently experienced the decline had been employed by the company for years, in some cases decades. In total, around 450 employees in Wetzlar lost their jobs. The news from Buderus was another low blow for the entire region surrounding the location, after the automotive supplier Continental had announced a few months earlier that it wanted to close its factory there. These are not isolated cases: Hardly a week goes by without a company announcing job cuts, a factory closure or the relocation of production abroad. The German economy is facing a breaking point. On the one hand, it suffers from enormous global competitive pressure. In addition, bureaucracy and regulation, high energy prices, political imponderables and technological transformation create a mixed situation in which the industrial substance threatens to erode. Opel partner Segula files for bankruptcy The reasons for the downsizing plans in the companies are often comparable, but the fates are nevertheless individual. In Darmstadt, the American company Borgwarner announced that it would cut almost 350 jobs at its subsidiary Akasol, which emerged from a student group at the TU Darmstadt and has developed into a flagship for electromobility. The parent company is reacting to the weakening demand for electric commercial vehicles. Just a few kilometers away, Opel partner Segula in Rüsselsheim filed for bankruptcy and operations at the testing facilities for cars with around 330 employees were stopped. 350 jobs will be cut: Borgwarner factory in DarmstadtBorgwarnerThe Lufthansa Group announced at the end of September that it wanted to cut around 4,000 jobs by 2030, and the Frankfurt headquarters is likely to be disproportionately affected. The tire manufacturer Goodyear recently closed its factory in Fulda with 1,000 employees. Evonik is ending the production of active pharmaceutical ingredients in Hanau, where 200 employees previously worked. In Lollar near Gießen, the brake disc manufacturer Breyden wants to permanently close a foundry with more than 200 employees. And in Central Hesse, the city of Lich is losing an important employer in the American online retailer Wayfair. The example of Buderus is an example of how serious the situation in German industry now is. The factory was technically up to date until the end; the electric arc furnace used was considered particularly advanced and climate-friendly – but it also consumed a lot of electricity, which is particularly expensive in Germany. And modern technology in favor of sustainability is of little use to companies if the electricity costs more than eat up the revenues to be generated. Is the crisis structural? Unlike previous economic dips, the impression is increasingly emerging that the crisis is structural. “Smaller companies in particular are closing forever without it showing up in the statistics – because they simply don’t see a future,” warns Kirsten Schoder-Steinmüller. The entrepreneur from Langen is President of the Hessian Chamber of Industry and Commerce. In the past few weeks, she has met many entrepreneurs who are giving up their self-employment and preferring to work as employees because they lack perspective. In addition to such quiet farewells, there are also major downsizing plans that affect many people, such as at Continental: Before the company renamed its automotive division Aumovio, thousands of jobs were cut there, not only in Wetzlar but also in Babenhausen, Karben and Frankfurt. “Smaller companies in particular are closing forever without it showing up in the statistics,” says Kirsten Schoder-Steinmüller.Frank RöthMany entrepreneurs and managing directors, but also banks and investors, report that they are putting off projects and postponing decisions and investments. But customers are also waiting to see whether the economic conditions improve again. Dirk Pollert, general manager of the Hessenmetall employers’ association, reports on a survey by the Ifo Institute that found that every third industrial company in Germany has had a deterioration in competitiveness compared to countries outside the European Union. He points out that the Hessian industry, with more than 105,000 euros per employee, is significantly more productive than the overall economy with around 92,000 euros. “Where productivity is high, wages are also attractive,” says Pollert. Not only the employees themselves benefited from these above-average wages, but also the entire regional economy, as they secured purchasing power, tax revenue and local demand. “The declining competitiveness of industry is therefore not only a problem for companies, but also threatens our entire prosperity.” Many entrepreneurs are disappointed with the federal government. The federal government’s policies are also causing uncertainty. Many entrepreneurs had great hope in the grand coalition’s plans and are now disappointed in many ways, as Schoder-Steinmüller reports. The President of the Hessian Chambers sees it as an opportunity that the special fund will provide 7.4 billion euros for investments in Hesse’s future. However, these funds would have to be used in a targeted manner and coordinated strategically. “In order for the investments to have their full effect, a coordinated investment architecture is needed in which roads, rails, energy infrastructure and living space are thought of and implemented together,” says Schoder-Steinmüller. The money must go where it has the greatest impact. “We would like to see more clarity about how the funds should be used,” says the entrepreneur. More on the topic Companies from the automotive and energy-intensive chemical industries have been particularly hard hit by the crisis. Classic chemistry, an important pillar of the Hessian economy, has lost around a third of its production since 2021. “There has never been such a cut over such a period of time,” says the chairman of the Hessian chemical association VCI, Joachim Kreysing, who is also the head of the Höchst industrial park. No chemical company can still produce profitably. Funeral march due to factory closure It can be assumed that the industrial electricity price from 2026 will provide relief for companies that require a particularly large amount of energy and are in international competition. But the relief could be linked to investing in new systems at the same time, as the media recently reported with reference to internal papers from the federal government. It is unclear whether the industrial electricity price will contribute to a noticeable improvement in the situation. According to VCI Hessen and the Hessenchemie employers’ association, nine out of ten companies recently saw no improvement and no signs of a trend reversal. Instead, around half of the companies surveyed expect a further decline in employment. At Buderus in Wetzlar, one last steel melt was carried out in the last week before the steelworks was closed. A few days earlier, the employees had expressed their displeasure and disappointment about the closure with a funeral march. Robin Mastronardi, managing director of the German Federation of Trade Unions in Central Hesse, did not spare any clear words: “Every lost job tears a hole in our society,” he said. It’s not about business calculations – “these are people, families, history. A plant like Buderus is not just any company – it is part of our industrial DNA.”
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