Debate on “Made in Germany” and Germany as an Industrial Hub

On the Center Stage at the Hanover Exhibition Grounds, IG Metall Chair Christiane Benner, Lower Saxony’s Prime Minister Olaf Lies, Arndt G. Kirchhoff, President of the Metal Industry Employers’ Association of North Rhine-Westphalia, and IfW President Prof. Dr. Moritz Schularick discussed the resurgence of “Made in Germany.”

The consensus was clear: Germany has lost industrial strength in recent years. Rising energy costs are increasing pressure on businesses and jobs, the public investment backlog has persisted for decades, and industrial policies being implemented in Washington and Beijing will pose a massive challenge, particularly to the export-oriented business model that has sustained Germany for many decades. Opinions diverged when weighing the individual findings: Which factor carries more weight—regulatory burdens, companies’ reluctance to invest, or missed opportunities for government policy-making? These questions have been and will continue to be the subject of heated debate. There was also no dispute on the panel that German industry continues to possess considerable strengths: technological expertise, a well-trained workforce, established international sales networks, and an industrial breadth that demonstrates its particular strength precisely in the interplay between large manufacturers and specialized suppliers. The decisive factor, therefore, is not so much whether the potential for a new industrial dynamic exists. What matters is whether the political framework is established in such a way that this potential can actually be realized.

The differences became clear when it came to specific measures, the distribution of burdens, and the priorities of government action. Christiane Benner, President of IG Metall, emphasized: “Germany as an industrial hub and the workers here do not deserve to be written off. Instead, they deserve confidence, competitive energy prices, a clear commitment to local value creation, good jobs in existing industrial sectors, and in future-oriented fields such as quantum computing, industrial AI, batteries and their recycling, and renewable energies. To achieve this, policymakers must demonstrate the will to truly advance German industry and its workers through consistent industrial policy, rather than merely offering grand rhetoric and references to supposed market-driven realities. With a commitment to balancing openness to new technologies like AI and humanoid robotics with security through investment and smart legislation, we must ensure that we are not left behind, especially in future-oriented fields. This country and its well-educated, skilled workforce are capable of great things and are eager to achieve them! They need the political conditions to use their skills to keep this location where it belongs in the long term: at the top.”

As president of the Metal and Electrical Employers’ Association in North Rhine-Westphalia, Arndt G. Kirchhoff represents the interests of an industry that faces intense pressure to adapt in the face of international competition, and whose companies are grappling with rising costs, structural change, and growing competition. In light of “the deep structural crisis of competitiveness in our state, he called for fundamental structural reforms in all policy areas relevant to Germany’s competitiveness as an industrial location. The combination of high energy costs, tax burdens and labor costs that are not internationally competitive, oppressive bureaucracy, and lengthy planning and approval procedures has, taken together, led to the domestic locations of our metal and electrical industry falling further and further behind in international competition. The no longer competitive business conditions are making it increasingly difficult for our companies to turn a profit in Germany. Investments in the future are now almost exclusively being made abroad. Month after month, our industry is currently losing 10,000 high-paying jobs, with serious consequences for the financing of social security systems and tax revenue. Both findings are dramatic news for Germany. Both findings are dramatic news for Germany. It is vital for our country that it remains an industrial nation. I expect policymakers to finally take the ongoing warnings from industry associations and companies seriously and to present, as a matter of urgency, a comprehensive and effective strategy to restore Germany’s competitiveness. They cannot afford to waste any more time.”

With Volkswagen as its largest OEM, a closely integrated supplier industry, a strong steel sector, and numerous hidden champions among small and medium-sized enterprises, Lower Saxony makes a significant contribution to Germany’s industrial base. Prime Minister Lies does not view the situation from a distance, but rather through close engagement with companies, works councils, and employees across the state. He emphasized the steps now required to ensure that industrial strength is maintained, modernized, and remains internationally competitive under changing conditions: “The close and trusting collaboration between policymakers, companies, and employees is a genuine locational advantage, especially in times of profound transformation. This is our Lower Saxony approach. It is crucial that we combine flexibility for businesses with security for employees, because only in this way can trust and prospects for the future be created. Change is most successful when it is shaped collaboratively through social partnership—through training, continuing education, and strong worker participation. This is the model for success, especially in challenging times. At the same time, we must move much faster: in planning and approval processes, in reducing bureaucracy, and in an administration that sees itself as a partner to the business community.” And one thing is clear: affordable and reliable energy remains essential for Lower Saxony and Germany as a whole to remain strong in the future. Now, more than ever, is not the time for ideology. This is the time for a new pragmatism. Every decision we make must now be guided by the need to protect jobs and business locations.

A strong comeback for “Made in Germany” will only succeed if policymakers, businesses, and workers see it as a shared responsibility. Industrial renewal requires investment, reliable framework conditions, corporate responsibility, and a strong workforce. In the union’s view, this cannot be achieved by pitting one group against another, but only through cooperation. Workers are not the cost of change, but its prerequisite. IG Metall will continue to advocate for this in political arenas and in the public sphere.