In an interview with the “Augsburger Allgemeine,” economist Lars Feld describes an industrial crisis that, while building slowly, then hits hard. He cites 150,000 job losses as an interim figure, linking this to location costs, stalled reforms, and the ban on combustion engines. For Feld, symbolic politics are less important than the competitiveness of businesses. (augsburger-allgemeine: 27.12.25)
150,000 as a starting signal for job losses
Feld expects further cuts because many companies only make reductions visible with a time lag, and because transfer companies mask the situation in the short term. In his view, the 150,000 figure represents not just statistics, but real job losses in families and regions. The industrial shock is also caused by location costs, as high production costs squeeze margins and drive relocations.
He also focuses on the coalition, because without a clear strategy, the restructuring of the social welfare system remains stalled. Feld quotes a core conflict verbatim: “The SPD fundamentally rejects necessary cuts.” For him, this statement explains the reform gridlock, and he speaks of stagnation when decisions are repeatedly postponed.
Chancellor Merz, the SPD, and the Reform Course
Feld criticizes Chancellor Friedrich Merz, but he primarily justifies this criticism with regard to leadership within his own party. Merz must secure majorities, and at the same time, he must prevent the reform agenda from being lost in day-to-day business. Feld uses a drastic image to illustrate this: Merz must “put a gun to the head” of his own party members to ensure that tough measures are even considered.
Feld is particularly outspoken on the issue of regulation, and he demands a clean break. The ban on combustion engines should be lifted because it blocks investment in drive systems and factories while simultaneously strengthening international competition. He also considers the heating law a misguided policy and warns that the industrial crisis could cost an additional 150,000 jobs if planning certainty is lacking. Many business owners interpret the ban on electric vehicles as a signal to expand more quickly abroad.
Energy Prices, Taxes, and Location Costs
Feld doesn’t fundamentally question the energy transition, but he criticizes its regulation through detailed guidelines. He says it embodies the “spirit of a planned economy,” while a clear CO₂ price, in his view, would be more efficient. At the same time, purchase prices are falling, but taxes remain high, and this is precisely what exacerbates location costs for companies and households.
He also calls for reforms in administration and government, because bureaucracy delays investments and increases the cost of innovation. In his logic, this is again linked to the backlog of reforms, because every new form ties up time, and this increases production costs in projects that actually need to be completed quickly. Competition doesn’t wait, and the industrial crisis is thus accelerating.
Pensions, Defense, and the Next Test
On pensions and healthcare, Feld is pursuing unpopular measures, as he wants to strengthen work incentives and retain skilled workers. Those who retire early should accept higher deductions so that companies can find staff more quickly. Feld also sees a backlog of reforms in this area and warns that rising social security costs will further fuel the industrial crisis.
The defense industry is seen as a short-term bright spot, but Feld tempers expectations because retraining takes time and expertise doesn’t simply shift. A factory worker doesn’t become a specialist overnight, and the debate surrounding the combustion engine ban complicates the transition when entire supply chains come under pressure simultaneously. The combustion engine ban also affects investment plans in supplier companies, which slows down the shift to other sectors. Feld therefore calls for public funds to be used strategically and not distributed as quick fixes.
What Matters Now
In the end, Feld again refers to the 150,000 figure, because for him this number marks the tipping point at which politics and business must act. He believes lower production costs are possible, but only with clear reforms, less regulation, and reliable framework conditions. Otherwise, job losses will not remain a temporary setback but will continue.