The China Mail - Germany's Bosch to cut 13,000 jobs in blow to auto sector

The auto industry in Europe's biggest economy has been hammered by fierce competition in key market China, weak demand and a slower than expected shift to electric vehicles.

The cuts, all of which will take place in Germany, represent about 10 percent of Bosch's total workforce in the country, and three percent of its staff worldwide.

Bosch -- the world's biggest auto supplier, making everything from braking and steering systems to sensors -- said the layoffs were needed to help make annual savings of 2.5 billion euros ($2.9 billion) in the group's car unit.

"Demand for our products is shifting significantly to regions outside Europe," said Stefan Grosch, head of industrial relations at Bosch. "We need to orient ourselves to where our markets and customers are."

Workers' representatives vowed to resist the cuts, labelling them "unprecedented".

- Slow EV shift -

Bosch had already announced 9,000 layoffs since last year and other automotive suppliers, including Schaeffler and Continental, have also laid off thousands.

The top carmakers themselves are facing serious problems, with 10-brand Volkswagen -- Europe's top automaker -- planning to cut thousands of jobs in Germany as sales and profits slide.

Sports car maker Porsche, a VW subsidiary, last week hit the brakes on its EV rollout due to weak demand.

The shift to EVs has been a key challenge, with many groups having invested heavily in the transition but electric cars failing to take off in a major way in Europe.

"Electromobility has not taken off as quickly as forecast," said Marco Zehe, head of electrified motion at Bosch."That means we have lots of overcapacity, particularly in Europe and particularly in Germany."

A fierce automotive price war in China is meanwhile cutting into car-part makers' margins, reducing their room for manoeuvre.

"There is great price and competitive pressure on the entire automotive industry," Zehe said. "On both carmakers as well as their suppliers."

And in the long-run, carmakers are increasingly looking to source components from local partners when they sell abroad, threatening the need for car parts made in Germany.

"The trend towards localisation is unstoppable," Markus Heyn -- head of Bosch Mobility, the auto unit -- told the Stuttgarter Zeitung newspaper earlier this month. "The days when Germany could produce a great deal for the rest of the world are over."

- 'Social devastation' -

While agreeing that the situation in the German automotive industry was "very tense", Frank Sell, head of the Bosch Mobility works council, vowed to fight the cuts.

"We nevertheless totally reject these historically unprecedented job cuts," he said, pointing out that Bosch had offered no guarantees that it would not close sites in Germany.

"Bosch is not only breaching the trust of those who have made this company big and succesful but leaving behind social devastation in many regions," he said.

Speaking to reporters, Grosch said Germany remained "central" to Bosch's future.

"We stand by it as a location and stand by Europe and are doing all we can to continually improve our competitiveness by our own efforts," he said.

K.Leung--ThChM