Frankfurt am Main – The mechanical and plant engineering sector has recovered from the COVID-19 crisis, and the order book is currently very strong. However, the medium-term effects of the war in Ukraine and the sanctions against Russia and Belarus can only be guessed at for now; in the short term, the first negative impacts are already being felt. In addition, a shortage of apprenticeship positions and investment spending that is out of step with the economic situation are jeopardizing future prospects. Production relocations and cost-optimization measures also remain on the agenda. In doing so, companies are jeopardizing the industry’s future. This is the finding of the “Trendmelder 2022,” an industry-wide works council survey conducted by IG Metall, which works council members from the sector discussed this week at a conference against the backdrop of current developments.
“The mechanical and plant engineering sector is initially back on solid footing following the COVID-19 crisis. However, this recovery is placing enormous work pressure on employees, without companies taking countermeasures through personnel policies,” says Wolfgang Lemb, executive board member of IG Metall, summarizing the key findings of the survey. An appropriate personnel policy is finally needed. “The machinery and plant engineering sector must once again increase its training efforts and offer apprentices permanent employment contracts.” This must be combined with qualified workforce planning that enables continuing education for all, as well as with more investment and innovation to manage the transformation, emphasizes Lemb, who, among other responsibilities, oversees sector-specific work in the machinery and plant engineering industry.
Significant Uncertainty in Logistics
In the survey, 78 percent of the works council members surveyed rated the current order situation as very good or somewhat good. According to the works councils’ assessment, this situation will not change in the short term, as—with a few exceptions, particularly in the agricultural machinery sector—there are no major customers in Russia, Belarus, or Ukraine. Consequently, larger corporations in particular have already put their business dealings with these countries on hold, closed their locations there, and are attempting to bring their employees back. Logistics currently poses the greatest uncertainty for fulfilling local orders: freight forwarders are already facing a shortage of drivers, and shipping air freight is becoming more difficult and even more expensive. In some cases, there are problems with supplier parts or a shortage of Ukrainian personnel. The greatest concern, however, is what impact the current situation will have on business with China, which is so important to the industry.
Demand for Skilled Workers Is Increasing
It is currently uncertain whether the war in Ukraine will have an impact on the employment situation. In the survey, 41 percent still expected an increase in permanent staff over the next twelve months. Among temporary employees, 15 percent anticipated an increase, and among temporary agency workers, 25 percent did so. The already reduced number of apprentices remains at a low level. Despite the demand for skilled workers, only 21 percent expect the number of apprentices to increase. “Companies have learned nothing from the crisis and have exacerbated their shortage of skilled workers through their own poor decisions,” warns Wolfgang Lemb. At the same time, work pressure is high. Overtime is required at 72 percent of companies, and 26 percent are already implementing special shifts.
No Catch-Up in Investment
The expected trend in investments and investments in research and development has recovered slightly. Twenty percent of companies plan to increase their investments. At 51 percent of companies, investment levels remain stagnant, with only 30 percent of respondents describing the investment situation as very good or somewhat good. Wolfgang Lemb: “The future prospects of these companies therefore remain at risk. This shows that we need more forward-looking collective bargaining agreements in the industry than the current or planned 9 percent.”
Politicians Must Support Works Councils
IG Metall is convinced that, in order to secure jobs in Germany’s largest employer sector, policymakers must also provide stronger support to companies and their works councils: Funding is needed for SMEs so they can adequately capitalize on the opportunities offered by digitalization. In addition, works councils need additional resources to manage the increasing and increasingly complex tasks involved in shaping the transformation. Wolfgang Lemb: “We need works council advisory funds and revised regulations governing time-off provisions for works council members, especially for small and medium-sized enterprises.”
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 securing the future. More than 600 works council members participated in the latest survey, which took place from January 17 to February 11, 2022. As a result, the findings do not yet reflect any potential impacts of the war in Ukraine.
Survey Results
