Volkswagen is planning to eliminate up to 100,000 jobs. It is the most devastating blow yet to the stomach of Germany’s believers in the green transformation, climate crusaders, and eco-socialists. Whether this shock will be enough to force the country onto a new political course, however, remains an open question.
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Volkswagen is far more than just another German automaker. The Wolfsburg-based company symbolizes both the extraordinary heights and the painful decline of modern Germany. It embodies the country’s moral failures born of political opportunism during the Nazi era, while also representing its postwar reinvention, economic recovery, and capacity for hope. Volkswagen is Germany Inc. cast into the form of an automobile company, and its current crisis looks less like the beginning of a new chapter than the closing pages of a long story — a national catastrophe.
What else, if not a biblical economic disaster, should one call management’s plan to eliminate 100,000 of its remaining 657,000 jobs over the coming years?
The restructuring will almost certainly have severe consequences for production sites that were already considered vulnerable. Hannover, Zwickau, Emden, as well as Audi’s Neckarsulm plant, are now widely expected to face closure. What is unfolding is far more than another corporate restructuring. It marks the beginning of a chain reaction that will spread through suppliers, logistics companies, and Germany’s entire industrial ecosystem.
Nor will Chancellor Friedrich Merz’s rearmament strategy alter this reality. Volkswagen simply cannot reinvent itself overnight. Whatever Merz and his advisers imagined when they proposed converting civilian automobile production into military manufacturing through debt-financed government programs ignores an obvious truth: military production and civilian industry are fundamentally different worlds. It is rather like expecting a manufacturer of fine porcelain to become a Michelin-star chef overnight. Plates and food may both belong in the same restaurant, yet they require entirely different skills.
Artificially manufactured fear of Russia will not revive German industry either. Industrial output now sits roughly 25 percent below the level it would likely have reached under normal market conditions, absent years of continuous ideological intervention from Brussels and Berlin. Merz’s military revival will not even produce the temporary stimulus of a classic Keynesian boom.
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The German economy is running on fumes. This lemon has already been squeezed dry.
The mountain of debt that will weigh upon our children will disappear into nothingness, except that it will continue filling the pockets of politically connected beneficiaries and subsidy hunters. That deserves mentioning because it perfectly captures the spirit of our age.
Industry is disappearing while the public sector keeps expanding. Germany has entered a dangerously unbalanced phase, and only a radical return to genuine market economics, accompanied by a dramatically leaner state, offers any realistic prospect of reversing course. Regardless, Germany will have to pass through a painful bottleneck of social and economic adjustment before there is any hope of seeing light at the end of the tunnel.
Meanwhile, hundreds of thousands are losing their jobs. Net investment has turned negative. Yet the federal government continues entertaining the public with increasingly bizarre fairy tales designed to sedate rather than inform.
Germany has exhausted itself. Capital is fleeing what has become Europe’s most toxic business location faster than the state can create new public-sector positions to conceal what has already become undeniable reality. Following the devastating news from Wolfsburg, Germany is entering the stage where the crisis can no longer be ignored. The country’s political architecture is beginning to fracture. The establishment’s so-called firewall cartel will likely close ranks even further. Any remaining differences between the Christian Democrats and the increasingly radical left will continue to dissolve as both sides seek to prevent further gains by the AfD.
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