Germany in August 2026: the most important developments in economy
In August 2026 the dominant economic story in Germany was the crisis at Volkswagen. On August 25 unionists warned that job cuts could reach 140,000, while the works council rejected layoffs and regional leaders warned of plant closures. Workers booed chief executive Oliver Blume on August 26, and on August 28 he warned of sweeping layoffs and the need for drastic cost cuts. The company plans to cut one in four management positions. Volkswagen also plans a pick-up truck for the US market, will build its electric ID.Every1 in Portugal, and won EU approval for the sale of its Everllence unit. It reported losses at the start of the new season.
Elsewhere in industry the picture was mixed. Siemens reported record results but gave a muted outlook, and Siemens Energy reported record orders while weighing the sale of its steam turbine business. Rheinmetall cut its sales outlook after Berlin scrapped a warship project, then announced hundreds of new jobs in Kassel. Commerzbank posted a record profit, and officials were reported to be considering selling the state's stake if UniCredit bids. Business bankruptcies reached a 20-year high, unemployment kept rising, and German investment in the United States fell by two-thirds in the first half. The US company Madison Air Solutions agreed to buy the fan maker ebm-papst for $5.4 billion.
Energy costs and supply were a second theme. Low water on the Rhine hit BASF and other industries; on August 20 the Bundesbank warned that it would slow the economy, and several states lifted truck driving bans. Germany risked missing its gas storage target, Uniper signed a Norwegian gas contract with Equinor, and Schwesig, the Minister-President of Mecklenburg-Western Pomerania, demanded a fuel price cap. Drivers moved to electric cars as fuel prices rose during the Middle East war.
Trade with China was the third theme. Chancellor Friedrich Merz signalled a tougher line. Ursula von der Leyen raised pressure over the EU trade deficit, and German ministers called for tariffs on Chinese plug-in hybrids, while Siemens chief executive Roland Busch urged the EU to drop tariffs on Chinese electric vehicles. Merz said an AfD win in the Saxony-Anhalt election would deter foreign investors.
by WorldBrief & Maksim Micheliov | AI-generated summary
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