Slumping sales, collapsing profits, factory closures and the threat of mass redundancies: Hardly a week goes by without new bad news from the automotive industry. Confidence in Europe's former flagship industry is dwindling rapidly, as the spectacular share price collapses of major manufacturers such as BMW, Mercedes, Porsche, Volkswagen and Stellantis have shown for some time now.

The stakes are high. In Germany, the technological change alone could lead to the loss of 400,000 often well-paid jobs, if a fifth of transport is electrified by 2030 as planned by the German government. The closer the scenario outlined by the „National Platform Future of Mobility“ in 2021 gets, the more the domestic industry is put on the defensive by strong competitors and sceptical consumers.

But there are rays of hope, as a current example from the Italian car metropolis of Turin shows. The Swiss industrial company Accelleron, which manufactures turbochargers for large marine engines, took over Officine Meccaniche Torino with 250 employees in spring 2023, and has since expanded its workforce to over 300 employees, mainly thanks to countless applications from engineers and experienced skilled workers from the Stellantis/Fiat plants. Over the next three years, Accelleron plans to take on a further 100 employees at OMT.

For former Fiat employees like Carla Sousa, the success of OMT/Accelleron is a stroke of luck. „We had good times in the automotive industry. Now my heart breaks when I see how my former colleagues are increasingly worried about their jobs,“ says the former Maserati product manager, who has been responsible for communications at OMT for six months. She admits that she was previously unfamiliar with her new industrial environment, in which there are bright prospects again.

OMT manufactures injection systems for large marine engines together with the company OMC2, which was only acquired in July in the Lombardy industrial city of Brescia. Orders are increasing explosively because many new, and in some cases older, ships are now being equipped and converted to run on two different fuels. In addition to CO2-intensive diesel, alternative, greenhouse gas-saving fuels are increasingly being used.

Marco Coppo, Head of Technology at OMT, comments that „as a smaller company, we are part of a stable industrial group. People are not numbers here and they see our potential. That's why we receive so many applications from highly qualified candidates.“

The engineer refers to other companies such as the Belgian Dumarey Group, which – also in Turin – is currently in the process of applying the knowledge available in the automotive industry in engine construction to environmentally friendly fuels (hydrogen), or to new customer groups (shipping companies). So is the crisis an opportunity?

Unfortunately, there are still hardly any interesting examples similar to those in Italy to be seen in Germany, says economics professor Enzo Weber, dampening hopes. As the long-standing director of the Institute for Employment Research (IAB) in Nuremberg, the 44-year-old has a special perspective on the anatomy of the crisis: „There is a fundamental industrial recession in Germany that goes far beyond the automotive sector," he says.

Weber backs up his statement with his own research. While the number of terminated industrial jobs has been increasing slowly but steadily for several years, the number of new jobs being created in industry is constantly falling. Weber explains the logic of his industry change radar by saying that if there was a significant industrial growth sector somewhere, it would have to be noticeable in the form of a change dynamic within the industrial sector.

Germany is currently feeling the full brunt of the negative side of the economic transformation process and „there is a lack of new things that could provide a positive balance“, he says. „We need a policy that brings the new to the fore, a policy that allows competition for the new to flourish.“

Of course, even Italy is still a long way from reaching that point: in Frosinone, an hour's drive south of Rome, there is a large Stellantis plant whose workforce has shrunk by around 2,000 employees since 2017 to 2,700 at present, and is likely to shrink further quickly in view of a current slump in orders of more than 30%. Not far from the factory is a prospering plant belonging to the Swiss-Swedish electrical industry group ABB. In principle, ABB could make good use of the skilled workers from the neighbourhood for its own expansion.

But the practice is obviously less smooth than the theory: „We generally prefer to hire candidates with little or no experience and train them ourselves in line with our production processes, products and corporate culture,“ says an ABB spokesperson, referring to this specific example.

Meanwhile, Swiss industry continues to lack skilled labour. This is not a new complaint ,and it has hardly become any quieter with weakened industrial demand. Halfway through the year, the employment statistics kept by the federal government in Bern show that almost 70% of all industrial companies that are actively looking for skilled labour are still finding it difficult or impossible to recruit.

Could specialists from the crisis-ridden European automotive industry ease the situation in Switzerland? Jean-Philippe Kohl, Deputy Director at the industry association Swissmem, thinks not. „We cannot expect the shortage of skilled labour to be alleviated,“ he says when asked.

Swissmem does expect German industry, the most important customer for Swiss industrial products, to recover. However, the association recognises that there are also automotive suppliers that are perhaps too strongly focused on parts for combustion engines, and could therefore experience structural problems.

Relevant examples already exist, and anyone who takes a closer look at the analysis of the state of the Swiss automotive supply industry published in spring is given a warning: on average, local companies still generate around a quarter of their turnover with products and services manufactured in Switzerland that are tailored to combustion engines. Although this is around 10% less than four years ago, it is still a lot for a sector that generates an annual turnover of around 13 billion sfr (13.9 billion euros) in Switzerland, with over 30,000 employees.

The industry analysis is based on a comprehensive company survey conducted every four years by the Swiss Centre for Automotive Research at the University of Zurich under the direction of Professor Anja Schulze. For the next five years, almost 15% of 127 responding companies are planning to make adjustments to their production capacities in Switzerland.

For Michael Siegenthaler, labour market specialist at the Swiss Economic Institute (Kof) at ETH Zurich, one thing is certain: "A shortage of skilled workers is a better scenario than a surplus of skilled workers due to a crisis – when a key industry such as the automotive sector gets into a crisis, entire regions are often affected, he says. Because those who can, leave the boat long before it sinks.

The less mobile employees are left behind. „That's why mass redundancies are always a turning point for entire regions,“ the economist notes from empirical research.