At Michelin, employees express their anger at the company headquarters in Clermont-Ferrand. A strike initiated by the CGT in support of colleagues from Vannes and Cholet affected by the reduction of jobs. After the German car manufacturer Volkswagen, it is the turn of the world’s number one tire manufacturer to announce a social plan. Announcements that had the effect of a bomb. Could this be a wave hitting European industry?
The automotive and chemical industries in crisis
Crises have been spreading across Europe for several years. Starting with what touches thecar. Volkswagen aims to cut costs and save four billion euros. The result is the destruction of jobs and the closure of factories. Europe’s largest automotive group sells less, especially in China, its main market. It is also the collapse of business that is behind the closure before 2026 of two Michelin sites in western France. 1200 people will lose their jobs.
Automotive suppliers are also suffering. 32,000 jobs destroyed in Europe among the subcontractors of large groups. Stagnant sales, high energy prices and Chinese competition are to blame, which is also causing the collapse of the European chemical industry.
The difficulties of Auchan
The crisis does not spare large-scale retail trade. If Leclerc, Système U or Intermarché do well, Auchan is in difficulty. 2,400 positions must be eliminated. For years, the group has been able to rely on its international activities to absorb French losses. But after leaving Italy in 2019 and China the following year, Auchan is preparing to abandon its main lifeline: Russia. If the surge in prices has contributed to increasing the turnover of large-scale retail trade, it has also eroded consumers’ purchasing power. Customers spend less in supermarkets.
Read alsoFrance: Retailer Auchan is preparing to announce a large-scale layoff plan
The steel industry in crisis
In addition to the automotive, chemical and large-scale retail sectors, the European steel industry is also sounding the alarm. Production suffers from weak demand and Asian competition. The crisis worsened this summer with the bankruptcy of the Liberty Steel mills in Poland and the Czech Republic. It therefore risks spreading to other sectors: wind and solar energy, construction, household appliances, machinery manufacturing, defense and technical equipment.
European exports depend on the American market
Added to this critical situation for European industry is the threat of customs duties Donald Trumpnewly elected president, wants to impose imports from all over the world. However, the EU is increasingly dependent on the American market for its exports. This makes it vulnerable to potential shocks arising from future trade policy of the UNITED STATES.
Interview between Time.news Editor and Industry Expert
Time.news Editor: Welcome, and thank you for joining us today. With the recent strike initiated by the CGT at Michelin, it seems we are witnessing not just localized unrest, but perhaps a broader wave of discontent across European industries. What’s your perspective?
Industry Expert: Thank you for having me. Yes, the situation at Michelin is indeed indicative of a larger trend that’s impacting various sectors, particularly automotive and manufacturing. The announcement to cut jobs at Michelin, coupled with similar moves by Volkswagen, clearly signifies a growing crisis in Europe’s industrial landscape.
Editor: The headlines about job cuts and factory closures are alarming. Can you elaborate on the underlying issues that are driving these drastic decisions?
Expert: Certainly. There are a few key factors at play. First, the decline of vehicle sales—especially in crucial markets like China—has forced companies like Volkswagen to reassess their business models, which involves significant cost-cutting measures. This is resulting in the closure of factories and the subsequent loss of jobs, as we are seeing with Michelin shutting down sites in western France.
Editor: It’s shocking to learn that over 1,200 people could be affected by job losses at Michelin alone. How widespread is this crisis across other sectors, particularly in connection with automotive suppliers?
Expert: The situation is indeed severe. It’s estimated that around 32,000 jobs have been lost among the subcontractors supporting the major automotive groups in Europe. High energy prices, stagnant sales, and fierce competition from Chinese manufacturers are creating a perfect storm that not only jeopardizes automobile production but also extends to the chemical industry, which relies heavily on a robust automotive sector.
Editor: Shifting gears to the retail sector, what’s happening there? It seems that not all players are equally affected, as you mentioned Auchan facing difficulties despite others like Leclerc and Système U performing well.
Expert: You’re right; the retail landscape is quite fragmented right now. While some retailers are thriving, others, like Auchan, are struggling due to a mix of factors, including reduced consumer spending and operational challenges. The crux lies in adapting to a rapidly changing market and consumer expectations. Those that can pivot effectively are likely to succeed, while others may find themselves in a precarious position, much like what we’re seeing in the industrial sectors.
Editor: With the rise of strikes and protests, do you see this as a potential turning point for labor relations in Europe? What should companies be prioritizing in this regard?
Expert: Absolutely. The increasing frequency and intensity of strikes might well signify a stronger push for labor rights and improved working conditions in Europe. Companies need to prioritize transparency, communication, and proactive engagement with their employees. Understanding their concerns, especially during tumultuous times, can help mitigate unrest and foster a more collaborative work environment.
Editor: As we conclude, what do you believe is the outlook for the European industry amidst all these challenges? Is there a light at the end of the tunnel?
Expert: The road ahead is undoubtedly tough. However, there is a significant opportunity for companies to innovate and adapt. Embracing sustainability, investing in new technologies, and redefining business strategies could pave the way for recovery. While the current situation is critical, industries that can evolve may emerge stronger, but it will require careful navigation through these challenges.
Editor: Thank you for your insights today. We appreciate your time and expertise on this pressing issue.
Expert: Thank you for having me. It’s essential to keep these conversations going as we navigate such complex issues together.