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No-deal Brexit could cost Germany 100,000 jobs, according to study

A no-deal Brexit could cost more than 100,000 jobs in Germany, hitting the auto and technology industries worst.

No-deal Brexit could cost Germany 100,000 jobs, according to study
The BMW plant in Dingolfing, Bavaria. Photo: DPA

That’s according to a new study by an economic research centre, which found Germany would be the worst hit EU country when it comes to jobs in the event that the UK leaves the EU without a withdrawal agreement in place.

The research, conducted by the Leibniz Institute for Economic Research Halle (IWH) and the Martin Luther University Halle-Wittenberg, looked at the effect of a hard Brexit on different parts of Germany, and showed the automobile and technology industries would bear the brunt.

SEE ALSO: Brexit planning: What you need to know about Germany's plans for a no-deal

SEE ALSO: 'Horror Scenario': How Brexit could affect Germany

“In no other country is the effect on total employment as great as in Germany,” one of the authors of the study, Oliver Holtemöller, told the newspaper Welt am Sonntag.

The study came as fears continue to grow over the outcome of Brexit. The UK is still scheduled to leave the bloc on March 29th, but there is currently no deal in place.

Business leaders in Germany have long been warning of the consequences of the UK leaving with no withdrawal agreement in place, saying it could cause huge disruption to trade.

SEE ALSO: German business warns of Brexit 'chaos'

Nonetheless, the financial capital Frankfurt has seen positive effects in the run up to Brexit, as several companies have relocated there or plan to in future.

On Sunday, a spokeswoman for the British government confirmed to DPA that Prime Minister Theresa May wanted to ask the parliament in London for more time for renegotiations with the EU. A vote on how to move forward is now scheduled for February 27th.

Car industry would be worst hit

After a so-called unregulated or disorderly Brexit, customs duties would be levied on imports to the UK. The  study captured how a resulting slump in exports would affect the job market in Europe. Further Brexit dangers for the labour market, such as unwillingness to invest, were not taken into account in the figures.

SEE ALSO: Frankfurt confident it is the big Brexit relocation winner: Special report

The researchers believe the states in most danger in the event of a no-deal are Baden-Württemberg, Bavaria and North Rhine-Westphalia, where car companies such as Audi, BMW, VW and Mercedes are based. States in eastern Germany, on the other hand, would not face the same high risks.

The car industry would be hit the hardest by a decline in exports, the study found. Measured in terms of the total number of employees, the greatest effects would be felt at VW's Wolfsburg location and at BMW's Dingolfing-Landau location in Lower Bavaria.

SEE ALSO: Germany softens firing rules to lure banks fleeing Brexit

For Wolfsburg, research showed that 500 employees were potentially affected, for Dingolfing-Landau it was 265. In both cases this amounts to about 0.4 percent of the total workforce.

Many employees (726 or about 0.3 percent) would also have to fear for their jobs in the Böblingen district near Stuttgart. Technology companies such as IBM and Siemens are located there, and Daimler also has a plant.

The situation is similar in Märkischer Kreis in southern Westphalia, where many medium-sized companies with foreign business are located – according to the study, 703 jobs or 0.3 percent of employees are potentially threatened here.

Over 600,000 jobs worldwide

The study showed that 612,000 people worldwide could lose their jobs after a no-deal Brexit. In France almost 50,000 workers would be affected, according to researchers' calculations, while in China it's 59,000.

In the study the authors assumed that British imports would collapse by 25 percent after a no-deal Brexit – a value that corresponds to to current estimates. They developed a formula that allowed them to calculate how such an import slump would affect which industry and which country. This was based on data from the World Input Output Database (WIOD).

Other Brexit news, on the other hand, should give hope to workers in the EU. The Dutch Ministry of Economic Affairs announced on Saturday that 42 British companies had moved to the Netherlands since 2018. According to their statement, €291 million has been invested in the move and some 2000 jobs have been created.

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WORKING IN GERMANY

Which Bavaria-based companies regularly hire English speakers?

Bavaria is no doubt a beautiful state with a strong economy, but can be a hard place for non-German speakers to integrate. The Local takes a look at job opportunities in Germany’s southeastern 'Free State.'

Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions. 

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds. 

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local. 

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with. 

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