Bosch Continues Production in Hungary While Downsizing in Germany

German multinational engineering and technology company Bosch is planning to close its plants in Sebnitz and Leinfelden. The closure would not be immediate, but gradual, but there is still huge opposition to the plan from the German trade union. As it is more cost-effective in Hungary, production will be relocated here, Világgazdaság reports.

The German public newspaper Tagesschau reported that Bosch plans to phase out production at its sites in Sebnitz and Leinfelden (Baden-Württemberg) by the end of 2026. The company says the decision will affect a total of 510 employees, 280 of them in Sebnitz.

Bosch cited increased price pressure and weak demand, particularly in the construction industry, which is important to the company, as the reasons for the planned closures.

In Sebnitz, for example, the Powertools division produces power tools, garden tools, accessories and measuring technology. This would not be discontinued, but, according to the company, production at the two sites would in future be continued in existing plants within the international production network, for example in Miskolc, northeastern Hungary.

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The development should not have come as a surprise to German workers – Bosch has already cut jobs in Sebnitz in recent years because of cost pressures – but it has naturally provoked strong resistance among them. The IG Metall trade union is sharply critical of Bosch’s plans to close its Sebnitz site.

This is a scandal against which we will fight with all the means at our disposal,”

stated Uwe Garbe, head of IG Metall East Saxony. The union has called a protest rally outside the plant on Thursday afternoon. The works council, workers and IG Metall also presented alternative concepts that they believe would allow production to continue. However, these were not accepted by management, though the union said their ideas had been swept under the carpet with poor justification.

Bosch’s basic argument is that the general economic situation has significantly reduced capacity utilization at both plants. “The cost and efficiency programs already under way are not sufficient to alleviate cost pressures and strengthen our competitiveness in the long term,” pointed out Thomas Donato, president of Bosch’s power tools division. At the same time, the company has announced and committed to implementing plant closures in the most socially acceptable way. Negotiations with workers’ representatives on concrete measures are expected to start soon.

Finally, Bosch also said, according to German media, that it had examined various scenarios for the future of the Sebnitz site, but that these had proved to be economically unsustainable. It is also currently considering the possibility of selling the plant.

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Bosch’s decision is not unique, they are not the only ones increasingly choosing Hungary over Germany, Világgazdaság points out in another article. On Saturday, the German press was calling Mercedes to account because the German car manufacturer is transferring jobs from Germany to Hungary.

The automotive giant’s CFO Harald Wilhelm said at the end of February that the share of production in countries with lower wage costs would be increased from 15 to 30 percent. He added at the time that they would not close any of their plants in Germany, but would cut costs by reducing staff turnover and a redundancy program across the group.

This would involve reducing production capacity in Germany by 100,000 units over the next three years and expanding capacity at the Kecskemét (central Hungary) plant by roughly the same amount to 200,000 units a year.

At the beginning of March, Minister of Foreign Affairs and Trade Péter Szijjártó announced that Mercedes’ new Kecskemét plant will start series production next year, doubling the company’s production capacity in Hungary. In addition, in mid-March, Prime Minister Viktor Orbán hosted Ola Kallenius, Chairman of the Board of Mercedes-Benz Group AG, for a working dinner to review the German company’s investments in Hungary.

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