Germany’s mechanical engineering sector is grappling with dual challenges from an economic downturn and shifts in the automotive industry, leading to increased short-time work, especially in Baden-Württemberg. Wörner GmbH, a manufacturer of precision components, is transitioning to reduced shifts and implementing short-time work to navigate falling demand. Despite these struggles, the company aims to leverage this downturn for modernization and digitalization efforts, hoping to return to full capacity once market conditions improve.
Germany’s industrial sector is grappling with a dual challenge from economic downturns and structural changes, resulting in an increasing trend of short-time work, with the southwest region feeling the most impact.
At Wörner GmbH in Denkendorf, located in the Esslingen district of Baden-Württemberg, the production hall has a rhythm of machines milling metal parts for assembly. These components, such as stoppers and positioning systems, are distributed globally, primarily utilized in the automotive industry, as well as in the manufacturing of kitchen appliances and electronic goods.
Having been established for nearly 60 years, Wörner Automatisierung currently employs about 90 people. However, the company is now facing significant challenges as it experiences the ramifications of a declining industry.
Tobias Weber, the company’s manager, explains the situation: ‘We have seen a worldwide drop in demand. Our customers felt it first, and now it’s affecting us. We shifted from three shifts to two shifts by late summer.’
The sluggishness in business stems from familiar issues: an underperforming economy and the ongoing transformation within the automotive sector, where European manufacturers are facing heightened competition from China alongside significant cost pressures. These challenges are now impacting mechanical engineering firms with a delayed reaction, leading to reduced production capacity in recent weeks.
In response, Wörner has decided to implement short-time work starting November 1. Initially, this will affect about 50 to 60 employees in assembly and production, with further decisions on reduced hours to follow shortly.
Carmen Mondel, who operates a machine to press cylinders into metal parts, might be impacted. She has worked at Wörner for a year and a half and expressed mixed emotions about the upcoming adjustments: ‘We’re anxious about what lies ahead, but we are also thankful for the opportunity to maintain our jobs. Short-time work is returning, not just for us at Wörner but across the industry.’
Statistics indicate that employment agencies throughout Germany have been observing increasing numbers, with Baden-Württemberg — known for its robust industrial base — being notably affected. In July, approximately 57,000 individuals were benefiting from economic short-time work in the state, consistent with figures from the previous month. The short-time work rate here reached 1.2 percent, significantly higher than the national average.
The German Engineering Federation (VDMA) has cautioned that more companies may soon follow suit with short-time work as the sector remains sluggish. From January to September, incoming orders to firms have decreased by an average of 13 percent.
Dietrich Birk, Managing Director of the VDMA in Baden-Württemberg, highlighted that ‘Currently, our companies are operating at about 79% capacity, nearing levels witnessed during the pandemic.’ He warned that if there isn’t a noticeable improvement by the year’s end, job cuts may become necessary.
Despite the tough circumstances, Wörner’s management maintains a positive outlook. They are focusing on resilience and have plans for future projects. ‘We are glad to have short-time work in place, allowing us to retain our core team and rebound as conditions improve,’ says Weber.
The company is also leveraging the current lull by initiating two significant projects: digitizing their sales process and optimizing assembly methods in collaboration with the Fraunhofer Institute. This approach aims to modernize operations during the downturn, ensuring the factory in Denkendorf can return to its former bustling activity.