German business leaders, economists, and entrepreneurs are calling for a return to a 40-hour work week in industry, without corresponding pay adjustments, to address concerns about the country's competitiveness. They warn that Germany risks widespread factory closures and a loss of economic standing if current trends continue. This push is in response to high labor costs, with unit labor costs in Germany reportedly 22% above the average of 27 comparable countries in 2024, and an average hourly wage in industry of $45, rising to $49.50 in manufacturing.
Several prominent figures are vocalizing these concerns. Lars Brzoska, CEO of Jungheinrich, stated that a return to a 40-hour work week is necessary to increase productivity and prevent job losses. Economists like Clemens Fuest of the Ifo Institute and Michael Hüther of the IW Institute also support the idea, with Hüther even suggesting a 42-hour work week. Rainer Dulger, president of the Employers' Association, believes it would be beneficial to return to 40 hours for a larger number of employees.
The urgency of the situation is highlighted by actions from major German companies. Volkswagen is reportedly considering cutting up to 100,000 jobs globally and closing or drastically reducing four factories. Mercedes-Benz is delaying tariff-related bonus payments until 2027 and is negotiating longer working hours without compensation, as its profits have halved and are expected to drop further in Q1 2026. While the IG Metall union opposes these uncompensated hour extensions, some exceptions are being made, such as at automotive parts manufacturer Aumovio, where a 38-hour week without a pay increase was agreed upon to prevent job cuts. This move is seen by some as a potential new reality for the German automotive industry.
