Crisis in North Hesse's industry: VW and SMA in trouble!

Crisis in North Hesse's industry: VW and SMA in trouble!

The stagnating industry in Hesse: A look at the challenges

There is currently a tense situation in Hessian industry. Rising energy costs, a shortage of skilled workers and international competition, especially from China, are causing problems for companies. Although this development affects the entire Federal Republic, the situation in northern Hesse is comparatively stable. Oliver Dietzel, trade unionist for IG Metall Nordhessen, is optimistic about the condition of the Volkswagen plant in Baunatal, even though the contracts of 720 temporary workers there were recently not renewed, which increases uncertainty for the employees. In an interview with HNA, he emphasizes that despite all the challenges, there are also bright spots, as the plant is benefiting from the demand for hybrids and combustion engines.

But the uncertainties are omnipresent. While the VW plant is the region's largest industrial employer, increasing reports of job cuts and site closures at other companies are causing concern. SMA Solar is planning to cut 700 jobs at its headquarters in Niestetal in order to respond to the decline in demand and falling prices. Putzmeister will also cease operations in Gründau by the end of 2025 - 250 employees will be affected as production will be relocated to Turkey.

Different industries, similar concerns

The challenges are noticeable in many areas of the industry. According to a report by hessenschau.de, both the automotive and steel and chemical industries are suffering from high production costs and international competition. The declining orders are pushing many companies to their limits. Companies like Continental are closing locations in Hesse, affecting a total of 1,200 employees, while Goodyear plans to close a factory in Fulda in 2025, cutting over 1,000 jobs.

Francisco Dietzel emphasizes that defense technology is a promising industry, but one that will not be able to compensate for the problems in the auto industry, which is under severe pressure. The development in the automotive industry is particularly alarming: over 12,000 jobs were lost due to the crisis in 2024 - large companies such as Bosch and ZF are affected. The challenges arise not only from high energy costs, but also from a lack of orders, which leads to inefficient production. Manufacturers in Germany have also seen their market shares decline in China, where domestic companies are asserting themselves better.

Inconsistent perspectives and necessary reforms

The IHK and other institutions are calling for urgent reforms to improve the economic situation. Dirk Pollert from the Association of Hessian Business Associations speaks of a structural crisis that can also be felt throughout Germany. Bureaucracy, slow authorities and high tax burdens often prevent companies from investing in a positive future. Although the unemployment rate in the state fell to 5.5 percent, the situation is still perceived as critical because early indicators point to a negative development.

Amid these uncertainties, training at VW remains attractive and it is expected that all trainees will be taken on. IG Metall has decided to use modern platforms such as TikTok to reach younger people and at the same time remains dependent on the traditional approach by works councils in order to focus on the issues of job security and a shortage of skilled workers. Dietzel also criticizes the excessive energy prices in Germany and calls for an industrial cost rate of 12 to 15 cents per kilowatt hour in order to increase competitiveness.

Finally, the hope remains that a solid reform approach and investments in infrastructure can support both local companies and Hessian industry. It remains to be seen how the situation in the region will develop.

For further details read the reports from HNA, hessenschau and ZDF.