Germany’s economy stalls as union readies strike threat against auto giants
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Germany’s economy started the new year without much energy, as a closely watched measure of business confidence held steady in January while the country’s biggest labor union warned it will ramp up fights with major carmakers over cost reductions and job losses. The Ifo Institute in Munich said Monday its business climate reading stayed at 87.6 points this month, unchanged from December and below what economists had predicted. Around 9,000 companies answer the monthly survey. Analysts polled by The Wall Street Journal had expected the number to climb to 88.0. “The German economy is starting the new year with little momentum,” Clemens Fuest, who leads the Ifo Institute, said in a statement. The flat reading comes as IG Metall, Germany’s most powerful autoworker union, said it would increase pressure on companies like Volkswagen and Mercedes-Benz if they keep pushing cost cuts and moving work to other countries. The union is getting ready for wage talks in the metal and electrical engineering sector later this year, with tough negotiations expected around autumn. Nadine Boguslawski, the head treasurer at IG Metall who sits on the boards of Mercedes and major parts maker Robert Bosch, spoke Monday at the union’s yearly press meeting. “We are prepared to take a stand against corporate strategies that prioritize profits and then resort to circumventing collective agreements and relocating abroad,” she said. “The driving force behind the economic upturn in 2026 will be employees and their incomes.” The union and carmakers will face off as the industry deals with tougher competition in China and from Chinese companies, the effects of American tariffs, and slower-than-hoped demand for electric cars. Worker representatives hold unusual power at big German companies. They get half the seats on supervisory boards, which lets them shape and even stop major company plans. Germany’s car…
Filed under: News - @ January 26, 2026 6:26 pm