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Thousands of temporary agency workers employed in the automobile industry are at risk of losing their jobs due to a slowdown in the German market, according to a news report in Frankfurter Allgemeine Zeitung.
The paper reports that a number of German car manufacturers have experienced challenging market conditions, including the likes of Volkswagen, Daimler and BMW. The carmakers rely on tens of thousands of agency workers and although the firms post healthy growth figures in China and the US, a downturn in domestic production is affecting business operations.
Experts believe that temporary agency workers will be the ones to suffer from the slowdown as they are the first to go when companies experience a slump in activity, which is increasingly fuelled by a fall in vehicle sales and production levels. Permanent workers will have less to fear as they have longer contracts while temporary employees can be easily laid off.
Earlier this week, VW Chairman Martin Winterkorn admitted the firm may cut some temporary jobs. The company is estimated to employ around 11,000 temporary agency workers in Germany.
According to figures by the German Auto Industry Federation, the number of agency workers in the sector grew by 10,000 to 60,000 in 2012. With updated data not available, experts speculate that part of the temporary workforce has already been laid off in the past six months.
The European auto industry heavily relies on temporary workers, but is losing ground as the European debt crisis continues to haunt the sector. Across the continent, the number of passenger car registrations has been on the decline for months, especially in Italy, Spain, France and Germany.