The German Locomotive Struggles to Get Going

In past decades, all economists, analysts, and hacks in the pay of the bourgeoisie, reassured the public by extolling the development sustained by the German industrial system and economy, comparing it to a powerful locomotive hurtling toward a future of progress.

It was said that this locomotive was capable of pulling all the carriages attached to it, including the Italian one, in its impetuous race towards new goals of full employment and prosperity.

The economic indicators of that production system were taken as a benchmark, almost as if to extol and invoke a virtuous pursuit, particularly on the part of Italy.

The data on the German economy, published in recent days, show that this seemingly unstoppable race is now coming to an abrupt halt, with hopes pinned on overcoming the crisis and a weak recovery expected in 2026.

We believe that this crisis is the overproduction one: the massive amount of unsold and unsellable goods is clogging the tracks and threatening to derail the locomotive.

Data provided by bourgeois analysts indicate that after two years of recession, in 2023 and 2024, the much-coveted recovery did not materialize. On the contrary, in August of this year, they had to record a 4.3% decline in industrial, energy, and construction production, compared to the previous month, caused mainly by a sharp contraction (-18.5%) in the automotive sector. It should be remembered that the automotive industry as a whole is the most important and significant sector in industrial production.

Unable and unwilling to admit that this is a general crisis of overproduction, already widely described by Marxist analysis, they present a different narrative that tells of continuous growth, although with a few ‘hiccups’.

It all started with the severe financial crisis of 2008, followed by a modest recovery, which was in turn interrupted by the pandemic of 2020. The outbreak of war between Russia and Ukraine, which began at this stage in February 2022, led to the loss of the significant Russian market and a sharp increase in energy costs, mainly due to the sabotage of the Nord Stream 1 and 2 gas pipelines in September 2022, which transported low-cost gas from Russia to Germany.

The Financial Times, processing and refining all the data from previous crises, states that German production in August 2025 fell to 2005 levels.

The relevant federal bodies and German industrialists are busy studying investments and programs to restart the ‘locomotive’, also taking into account the necessary transformations regarding the production of electric vehicles. In this regard, with the aim of reducing costs and maximizing profits, the Volkswagen and Mercedes car manufacturers, following the example of France’s Renault, have launched a project to build electric vehicles directly in China, taking advantage of its experience in this sector.

It is obvious that this sharp slowdown will have a particular impact on the Italian automotive sector, as the German industry absorbed 20% of car component exports from Italy, a share that is unlikely to be maintained.

As a result, the crisis in the Italian automotive sector is likely to be very severe in the near future because, in addition to the German crisis, there is a sharp 42.8% reduction in car production in Italy by Stellantis (formerly Fiat), where, among other things, many small subcontracting companies work as sole suppliers to the car manufacturer. These small companies will therefore be the first to suffer cuts and massive layoffs due to their small size and dispersion across the territory, and their workers will be more easily sacrificed on the altar of capitalist profit.

Only by relying on organized and effective class-based unions will workers be able to oppose their sacrifice and obtain adequate defense and economic compensation, the main of which will be full wages for laid-off workers.