Kärcher CEO warns Europe faces deindustrialisation 'perfect storm'

Hartmut Jenner, the chief executive of German cleaning equipment manufacturer Kärcher, warns that deindustrialisation is a present reality for Germany and Europe. He cites the loss of tens of thousands of industrial jobs and declining production volumes as concrete evidence. Jenner argues a 'perfect storm' of geopolitical trade tensions, unfair competition from China's subsidised industries, and domestic regulatory failures is driving this decline.

Jenner states that fair global competition has become almost impossible for private European companies. Key sectors like automotive and mechanical engineering are now negotiating plant closures and production relocations. Building new capacity or employment in domestic production is hardly justifiable in business terms, he says.

China's state-led model creates unfair competition

Jenner attributes Europe's industrial challenges directly to China's economic model. He claims China's state industrial policy, massive subsidies, and artificially competitive currency create noticeable market distortions and overcapacity. This threatens European industries. China has become a highly aggressive technological competitor that threatens to outpace key European industries in future-oriented fields. Jenner disputes the notion that China's lead rests solely on technological superiority.

Germany's structural costs and rigid systems undermine viability

Rising domestic costs are equally crippling. Jenner states that new production facilities and jobs in Germany and Europe are barely economically viable due to rising structural and labour costs. He highlights that social security contributions have exceeded the historically critical upper limit of 40 percent. Money and personnel needed for core business and innovation are being wasted on documentation requirements alone. Cosmetic corrections are not enough, Jenner argues, calling for a cultural change in administration where authorities become digital enablers and service-oriented partners.

He lists essential reforms needed to improve viability:

Reforms needed to restore competitiveness and growth

Jenner calls for a unified European trade stance that guarantees fair competition and consistently punishes rule-breakers. He demands reduced bureaucracy, limited social security contributions, and flexible working-time models. Demographic trends require an increase in the overall volume of work in the economy, he notes. Dismissing labour market debates as an attack on workers' rights ignores reality and endangers jobs.

The German federal government's current reform policy approaches point in the right direction but fall short, according to Jenner. A flood of regulations from Brussels to Berlin ties up valuable working time and costs companies millions. Reform fatigue and regulatory zeal among authorities brake investment. He states that borrowed growth from state special funds, defense orders, and subsidies does not replace self-sustaining private investment.

Hartmut Jenner said: "If other countries are already moving toward eliminating reporting obligations overall, this must send a clear signal to Germany and all Europe."

He concludes that value creation is the precondition for prosperity, not the other way around. Clear orientation and bold action are needed to regain trust in economic strength. Jenner calls for a real fitness programme for Germany and a resolute trade policy at the European level to ensure fair competition and sustainable growth.