Mahle is in deep crisis. The traditional automotive company is struggling with massive cost pressure and is implementing the largest job cuts in its recent history. Locations in Germany are particularly affected. 1,000 jobs will be eliminated, a significant reduction in workforce that is shaking the entire automotive industry. In addition to the main cause, the structural transformation surrounding combustion engines, global uncertainties and financial constraints are playing a crucial role in the management’s recent decisions. (zeit: 03.11.25)
Strategic restructuring in a difficult situation
The current crisis is forcing Mahle to take drastic measures. The austerity program is hitting the company’s headquarters in Stuttgart particularly hard. A large part of the administration and development departments are located there. The group plans to save 150 million euros annually, one-third in operating expenses and two-thirds in personnel costs. This also reflects the cost pressure on the organizational structure: significantly fewer employees will be expected to deliver the same level of performance in the future.
The job cuts are to be implemented primarily through severance packages and early retirement schemes. CEO Arnd Franz emphasizes the company’s efforts to find socially responsible solutions. However, the difficult situation persists: a mid-three-digit number of jobs in Germany will be eliminated. The automotive industry demonstrates that even established companies are not immune to disruptive changes.
Challenges for the Automotive Industry
The automotive industry is experiencing a massive transformation, which Mahle is feeling acutely. The shrinking market for components for internal combustion engines, such as pistons and cylinders, is leaving gaps in sales and production. The situation is exacerbated by aggressive competition from China and tariffs in the USA. This leads to further cost pressure and adds weight to the structural transformation. It is hardly surprising that Mahle had already cut 600 jobs in the summer.
This structural change affects not only Mahle but the entire automotive industry. Engine parts, previously core products, are becoming increasingly less important. While Mahle is venturing into new fields – such as electromobility and alternative drive systems – the pace is not sufficient to fully offset the economic disadvantages. The impact of this development is affecting the company and intensifying the crisis in the traditional segment.
The Future Between Transformation and the Need for Cost Cutting
Mahle faces the major challenge of navigating between its traditional strengths and the new market equilibrium. The need to cut costs is forcing the company to question old structures and pursue new paths. However, the adaptation is progressing slowly. While competitors are reacting more quickly, Mahle seems to be caught between classic and modern technologies.
Job cuts and new investments will characterize the coming years. Although the company is trying to focus more on future-oriented areas, the financial challenges are weighing heavily. The difficult situation is evident, not least in the fact that over 600 jobs were already eliminated a few months ago – another round of job cuts now represents the deepest cut of the decade.
Interim Assessment of a Rocky Transformation
The crisis is fundamentally changing Mahle. Employees, investors, and the entire Stuttgart region are watching the developments with apprehension. Whether the current austerity measures will be sufficient remains to be seen. However, it is clear that the company’s former strength in components for internal combustion engines is no longer a reliable economic driver. New technologies offer opportunities, but they require significant investments, which Mahle must shoulder in the midst of a difficult economic period.
As long as cost pressure remains high and the business with older generation powertrain components shrinks, there are few alternatives to job cuts. A complete change of course will only become apparent when new product lines are sufficiently profitable and the areas of innovation bear fruit.