Frankfurt am Main – The machinery and plant engineering sector is recovering slowly but noticeably from the COVID-19 crisis. Nevertheless, many companies continue to focus exclusively on job cuts, production relocations, investment restraint, and a freeze on training. In doing so, they are jeopardizing the industry’s recovery and long-term success. This is the finding of the “Trendmelder 2021,” an industry-wide works council survey conducted by IG Metall.
“The recovery in the machinery and plant engineering sector is underway, but it’s not reaching the employees,” says Wolfgang Lemb, executive board member of IG Metall, summarizing the key findings of the survey. This is not only unfair, but also short-sighted and counterproductive. “The machinery and plant engineering sector needs its creative, qualified skilled workers to overcome the crisis through innovation and shape the transformation. That is why high training rates and regular continuing education, based on sustainable workforce planning, are essential,” emphasizes Lemb, who is responsible, among other things, for industrial, energy, and structural policy. The survey results were presented today at a symposium with works council members in Frankfurt.
More Orders Expected
The forecast for incoming orders suggests a slow recovery: 38 percent of the works council members surveyed expect the number of incoming orders to rise over the next twelve months, while 41 percent expect it to remain stable. Only 9 percent expect fewer orders. Additionally, 36 percent each expect both revenue and capacity utilization to rise. Only 12 percent and 13 percent, respectively, expect revenue and capacity utilization to decline.
Relocations and Layoffs Despite Recovery
Although the path out of the crisis appears to be gaining momentum, the situation for employees has improved only slightly: 49 percent of respondents state that job relocations are currently underway, planned, or have already taken place in the last 12 months. According to the respondents’ estimates, the number of employees will continue to decline in 32 percent of companies over the next 12 months. In 17 percent of companies, layoffs have even been announced. When employment is being expanded, it is primarily in the form of temporary work. The already sharply reduced number of apprentices will shrink further in 31 percent of companies. “By making their own poor decisions, companies are thereby exacerbating their shortage of skilled workers,” warns Wolfgang Lemb.
Alarming Investment Backlog
The expected trend in investment, including investment in research and development, remains at a low level. Only 12 percent of companies plan to increase their investments. At 47 percent of companies, investment levels will remain unchanged, with only 19 percent of respondents describing the investment situation as very good or somewhat good. Wolfgang Lemb: “This poses a long-term threat to companies’ future prospects—and this at a time when 67 percent report that they are, at least in part, in the midst of transformation.”
Policy Must Provide Incentives
IG Metall is convinced that policymakers must also take action to secure jobs in Germany’s largest employer sector: Massive incentives for investment, innovation, and value creation are needed now in Germany and the EU. Government funding conditions and lending criteria must be sustainably geared toward securing employment, and the suspension of insolvency law must be extended. Wolfgang Lemb: “The COVID-19 crisis has shown how important local value creation is. Relocating manufacturing jobs undermines Germany’s strength as an industrial hub. Policymakers must therefore no longer use taxpayer money to support companies that relocate production and cut jobs.”
The Trend Report is an annual survey of works council members in the machinery and plant engineering sector conducted by IG Metall every spring since 2017. It captures their perspective on the industry. This year, it was expanded to include questions on the effects of the COVID-19 crisis. More than 350 works council members participated in the latest survey, which took place from January 18 to February 12, 2021.
You can find more results presented in graph form here:
Further information and press photos of Wolfgang Lemb
