Germany's industrial sector is facing a major debate over working hours as manufacturers struggle with rising costs and weakening competitiveness. Senior executives at companies including Mercedes-Benz and toolmaker Stihl have backed a return to a 40-hour working week without additional pay. They argue that Germany's high labour costs are making it harder for manufacturers to compete internationally.
The proposal would reverse a major change in German working life that followed one of the country's most bitter labour disputes of the postwar era.
The 35-hour week was introduced gradually after a major dispute in 1984. Tens of thousands of metalworkers in what was then West Germany took part in a seven-week strike to secure shorter working hours.
Today, 35 hours remains the collectively agreed standard for about one-fifth of German employees, particularly in automotive manufacturing, engineering, iron, and steel. Across all sectors, the average working week is 37.8 hours.
Martin Brudermüller, chair of the Mercedes-Benz Group supervisory board, has argued that Germany should seriously consider returning to a 40-hour week. Speaking to Handelsblatt earlier this summer, Brudermüller said labour had become too expensive in Germany by international standards. He also said the country had lost its productivity advantage over important competitors.
An hour of manufacturing work in Germany costs about €49.50. That is 47 per cent higher than the European Union average of €33.70. The gap is even wider compared with some eastern European economies. Manufacturing labour costs about €15.60 an hour in Hungary.
German employees remain highly productive, but unit labour costs have risen significantly faster since 2023 than in previous years, according to research from the IMK think tank. For manufacturers competing globally, the combination of high labour costs and weaker industrial output has increased pressure to reduce costs.
German industrial production has fallen by more than 15 per cent since its peak in late 2017. Manufacturers have faced successive energy price shocks, stronger competition from China, US tariffs, and the disruptive shift towards electric vehicles.
Marcus Berret, global managing director at consultancy Roland Berger, said Germany previously benefited from political stability, strong infrastructure, skilled workers, and dense industrial clusters. But he said those advantages had weakened as the cost gap with eastern Europe and other competing economies widened.
Around 6.5 million people still work in German manufacturing. Berret expects that number to fall further and said employment could eventually drop below 5 million. The supplied report says between 12,000 and 15,000 manufacturing jobs are currently disappearing each month.
Germany's largest industrial union, IG Metall, rejects the argument that manufacturers are restricted by an inflexible 35-hour week. Nadine Boguslawski, the union executive responsible for collective bargaining and a member of Mercedes-Benz's supervisory board, said existing agreements already allow companies to increase or reduce working hours.
She also said IG Metall was prepared to consider tailored solutions for companies facing difficulties. However, Boguslawski warned that increasing working hours could mean companies need fewer employees to complete the same amount of work.
Martin Werding, a member of the German Council of Economic Experts, takes a different view. He argues that the amount of work available depends on whether German companies remain competitive. If lower labour costs per unit of output make factories more competitive, companies could retain production and jobs that might otherwise move abroad.
Moving from 35 to 40 hours without additional pay would increase working time by about 14 per cent while leaving weekly wage costs unchanged. The disagreement is therefore about more than working hours.Employers see longer working time as a possible way to reduce costs and protect production. Unions fear it could reduce the number of workers companies need.
The latest industrial pay negotiations are due to begin in October. It remains unclear whether the demand for a return to the 40-hour week will formally become part of those talks. For German industry, the debate reflects a wider struggle over costs, jobs, and international competitiveness. For workers, a return to longer hours without additional pay would represent a significant change to conditions secured decades ago.
