Germany faces 'failure' if work hours aren't extended, business leaders warn

A fierce debate over working hours has erupted in Germany, with prominent managers, economists, and entrepreneurs advocating for a return to the 40-hour work week in industry, without corresponding pay increases. They caution that Germany risks a loss of competitiveness and widespread factory closures if current trends persist.

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We must return to the 40-hour work week in industry, without pay adjustments. We need to increase productivity again. Those who want to work more should be able to. If we continue like this, we will fail, and in the end, nobody will have a job.

Lars Brzoska, CEO of logistics giant Jungheinrich, issued a stark warning: "We must return to the 40-hour work week in industry, without pay adjustments. We need to increase productivity again. Those who want to work more should be able to. If we continue like this, we will fail, and in the end, nobody will have a job."

The situation at Volkswagen exemplifies the gravity of the problem. The company is considering cutting up to 100,000 jobs globally, with four factories facing closure or drastic reductions. Similar measures are being announced by other industry leaders. Mercedes is delaying tariff-related bonus payments until 2027 and negotiating longer working hours without compensation. The company's profits have already halved, with a further significant drop in the first quarter of 2026.

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We can only talk about more free time if prosperity is growing.

High labor costs are a major challenge for German industry. According to the Institute of the German Economy, unit labor costs in Germany were 22% above the average of 27 comparable countries in 2024. The average hourly wage in industry stands at 45 euros, rising to 49.50 euros in manufacturing, significantly higher than in most of Europe.

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You cannot achieve the same in 35 hours as in 40 hours.

Economists largely echo the concerns of business leaders. Clemens Fuest, head of the Ifo Institute, stated, "We can only talk about more free time if prosperity is growing." Michael Hüther, director of the IW Institute, even proposed a 42-hour work week, while economist Monika Schnitzer commented, "You cannot achieve the same in 35 hours as in 40 hours." Rainer Dulger, president of the Employers' Association, suggested, "It would be good if we returned towards 40 hours for a larger number of employees."

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It would be good if we returned towards 40 hours for a larger number of employees.