Layoffs at Caravan Maker LMC Signal Deepening Woes Across German Industry

LMC cuts 106 jobs as demand slumps; auto, steel, and chemical sectors face waves of layoffs, fueling deindustrialization fears in Germany.

Germany's industrial slowdown is hitting even niche manufacturers. LMC, a Westphalian caravan and motorhome builder, has announced 106 job cuts at its Sassenberg plant—88 of them effective at the end of July 2026, with the remaining 18 leaving by January 2027. The reductions are part of a broader restructuring that has already slashed the company's workforce from 1,200 to roughly 500 employees.

To ease the transition, management and worker representatives have agreed on a social plan centered on a transfer company. Affected staff will receive full pay for several months, followed by up to six months of "transfer short-time work benefits" worth 80 percent of their last net salary. Managing director Bodo Diller promised extensive retraining opportunities. "The goal is to enable employees to make a fresh start in the labor market," Diller said.

The cuts reflect a continent-wide slump in caravan and motorhome demand. LMC is hardly alone. Volkswagen reported a nearly 9 percent drop in second-quarter 2026 sales to about 2.1 million vehicles. The Chinese market, once a growth engine, plunged by more than a third. VW CEO Blume has refused to rule out factory closures, and media reports suggest up to 120,000 jobs could be at risk worldwide. Uncertainty hangs over German plants in Emden, Hannover, Neckarsulm, Osnabrück, and Zwickau; the supervisory board recently rejected a proposed cost-cutting package, leaving roughly 40,000 workers waiting for clarity.

The auto sector is just one piece of a larger puzzle. In steel, Thyssenkrupp Steel Europe plans to eliminate 11,000 positions. Salzgitter is fully taking over Duisburg rival HKM, which will shed about 2,000 of its 3,000 jobs by the end of 2028. Production there will shrink to 2 million tonnes of crude steel, using an electric arc furnace that cuts CO? emissions by 90 percent. Chemical giant Evonik is also trimming roles in Witten and Marl. The industry association VCI warns of a creeping deindustrialization, pointing out that Germany's energy costs exceed those in the US or China and that a quarter of all shuttered European chemical capacity is now on German soil.

Meanwhile, the federal government is planning a 2027 reform of dismissal protection. The change targets employees earning more than €15,000 a month, making it easier to part ways via severance packages. Some experts fear the move could stifle career progression by encouraging early exits for payouts.

The consolidation wave is spreading to other sectors. The Warsteiner brewery group is negotiating the future of its plants in Herford and Paderborn. Herford may close at the end of the summer; for Paderborn, a buyer is being sought. Another round of talks with the NGG union is scheduled for mid-July.