By Hartmut Jenner, CEO and Chairman of the Board of Management at Alfred Kärcher SE & Co. KG

Europe’s industrial competitiveness is under growing pressure from geopolitical uncertainty, global competition and domestic barriers to investment. Unpredictable US trade policy threatens new tariffs, while China has emerged as a major technology competitor, supported by a state-led industrial strategy that has contributed to market distortions and overcapacity.

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For European manufacturers competing under market-based conditions, the result is an increasingly uneven playing field.

Europe’s Industrial Base Faces A Turning Point

The effects are already visible in declining production and job losses. Decisions by automotive and manufacturing companies to close plants or relocate production show that deindustrialisation is no longer a distant risk.

As a family-owned business operating through 170 subsidiaries in 87 countries, Kärcher has maintained resilience through a balanced business model serving both business and consumer markets. The company continues to invest in research and development, including autonomous cleaning robots, battery technology and digitalisation.

However, even innovative companies cannot indefinitely absorb rising operating and employment costs alongside intensifying competition. Expanding domestic production or hiring additional staff is becoming increasingly difficult to justify economically.

Germany Needs Private Investment, Not Temporary Stimulus

Forecasts of a return to growth in Germany offer some encouragement, but a modest recovery should not be confused with lasting economic strength. Government spending, defence investment and subsidies may provide a short-term boost, but cannot replace sustained private-sector investment.

Domestic challenges are also holding businesses back. Regulatory complexity, bureaucracy and reform fatigue are making it harder for companies to invest and adapt. Rules introduced to manage economic activity increasingly risk discouraging entrepreneurship and innovation.

Jenner also links economic uncertainty to declining public confidence, arguing that the rise of political extremism reflects a demand for greater stability and tangible reforms.

He emphasises that prosperity and strong social standards depend on value creation. Drawing on his experience growing up on his parents’ farm, he describes success as 97% hard work and dedication, 2% talent and 1% luck.

Germany Needs A Competitiveness Agenda

Germany needs a comprehensive programme to improve its business environment, Jenner argues. Excessive bureaucracy, high energy prices, rigid regulations and rising non-wage labour costs are weakening companies’ ability to compete.

He warns that if social security contributions remain significantly above the historically important 40% threshold, tax cuts and subsidies will have limited impact without broader structural reform.

Although the federal government has taken steps in the right direction, Jenner believes they remain insufficient. Compliance requirements continue to divert employees and financial resources away from core operations and innovation.

He calls for public administration to become more digital, responsive and service-oriented, including through the use of artificial intelligence. Rather than adding further reporting obligations, governments should focus on simplifying procedures and reducing the administrative burden on businesses.

More Work, Less Bureaucracy And Fairer Trade

Europe must also address labour shortages linked to demographic change. Jenner calls for a broader discussion about incentives for overtime, more flexible working arrangements, rules governing continued pay during medical leave and simpler recruitment procedures for skilled workers.

He argues that protecting competitiveness is essential to protecting employment, warning that inaction could ultimately put jobs at risk.

Trade policy is another priority. Europe should defend fair competition and respond consistently to violations of trade rules. Free trade, Jenner says, can only function when the same standards apply to all participants.

Ultimately, restoring Europe’s competitiveness requires less regulation, greater personal responsibility, stronger incentives for investment and more predictable business conditions. Jenner argues that lasting reform will depend not only on policy changes but also on a shift in mindset and a willingness to address structural weaknesses.

About Kärcher

Founded in 1935 and headquartered in Winnenden, Germany, Alfred Kärcher SE & Co. KG is a family-owned company specialising in cleaning and care products. It reported nearly €3.5 billion in revenue in 2025, with 86% generated outside Germany.

The Kärcher Group operates in 87 countries, employs approximately 17,000 people worldwide and offers more than 3,000 products.