Kärcher CEO warns Europe faces 'perfect storm' as he calls for economic reforms

Jenner sees several pressures reinforcing one another. Geopolitical crises cloud the outlook. US tariff threats and trade barriers disrupt export-oriented companies. China has moved beyond low-cost manufacturing and is challenging European firms technologically. At home, Germany faces high structural and labour costs, heavy regulation, and weak private investment.

China’s subsidies and competitiveness-focused currency policy create market distortions and overcapacity, Jenner argues. US trade policy adds uncertainty because tariffs can appear without warning. Meanwhile, regulations from Brussels to Berlin can make investment and entrepreneurship harder. Together, these forces reduce the room for privately run European manufacturers to compete fairly.

Jenner says the danger is already visible in lost industrial jobs, falling production, and possible plant closures. He also considers forecast growth of 1.3% cautiously optimistic, calling it borrowed growth when driven by debt, defence orders, and subsidies. Without reforms, Europe risks deeper deindustrialisation and weaker long-term prosperity.

Deindustrialisation is the decline of a country’s industrial production, industrial jobs, or manufacturing capacity. It matters because factories support skilled employment, business investment, and wider economic activity. When production moves away or plants close, a country can lose capabilities that are difficult to rebuild.

Jenner says Germany is already experiencing this process. He points to the loss of tens of thousands of industrial jobs and a decline in production volume. Plant closures and production relocations are being discussed in major sectors, including automotive and manufacturing. These are concrete signs that the problem has moved beyond forecasts.

The situation also reflects Germany’s cost and competitiveness pressures. Jenner says new facilities and additional jobs are barely economically viable in Germany and Europe. If that continues, more production may relocate, industrial employment may fall further, and Europe could become less able to compete in future-oriented industries.

Kärcher is a large, family-owned German manufacturer with a global footprint. It makes more than 3,000 cleaning and care products, including its well-known high-pressure cleaners. The company is headquartered in Winnenden, Baden-Württemberg, and operates in 87 countries.

Its scale has grown sharply under Hartmut Jenner, who has led the company since 2001. During that period, Kärcher tripled its staff numbers and turnover. In 2025, it generated almost €3.5 billion in turnover and employed 17,000 people worldwide. More than 1,000 employees work in research and development.

Kärcher is also highly dependent on international markets. The company earned 86% of its turnover abroad. That global reach creates opportunity, but it also exposes Kärcher to tariffs, trade barriers, geopolitical crises, and unequal competition. Jenner therefore sees European trade policy as important to protecting companies that sell internationally.

European manufacturers compete globally, so both policy shocks and cost advantages matter. US tariffs or trade barriers can suddenly make European goods more expensive or harder to sell. That uncertainty discourages investment because companies cannot reliably predict market access or export costs.

China creates a different pressure through state support. Jenner points to massive subsidies in strategic industries and a currency policy focused on competitiveness. These measures can support production, encourage excess capacity, and distort market prices. Chinese firms can then compete aggressively in technologies where European companies are still investing.

For a privately run manufacturer, the result is an uneven contest. Kärcher must carry its own research, labour, and production costs while facing rivals supported by state policy. Jenner says this makes fair global competition almost impossible. He wants a determined EU trade policy toward both China and the United States.

Jenner’s proposed response is to make business conditions simpler and more rewarding. He calls for major cuts in bureaucracy and an end to regulatory excess that discourages investment. He also wants incentives for extra work, arguing that effort and dedication help sustain economic performance.

Trade policy is another central part of his plan. Jenner urges the European Union to take a firm approach toward China and the United States. That means responding to subsidies, trade barriers, and unfair competition rather than leaving European manufacturers exposed. He also stresses research, innovation, and private investment as sources of durable growth.

His broader message is that government debt, defence orders, and subsidies cannot replace a self-sustaining recovery. Germany needs reforms that encourage entrepreneurship and new production. If rules become less restrictive and work becomes more attractive, companies may find it easier to invest, hire, and compete from Europe.

High structural and labour costs directly affect whether a company can justify expansion. A new factory requires large, long-term investment. If expected costs exceed likely returns, management may delay the project, reduce its size, or choose another location. The same calculation applies to creating additional jobs.

Jenner says this is already happening at the margin. New production facilities and extra jobs in Germany and Europe are barely economically viable. Combined with weak competitiveness, US trade uncertainty, and Chinese state support, these costs make European production less attractive. Plant closures and production relocations are already being negotiated in key German industries.

The likely consequences are fewer industrial jobs, lower production volumes, and weaker investment. Regions dependent on manufacturing could face a broader downturn. Over time, Europe could lose industrial capabilities and become more dependent on production elsewhere. Jenner argues that reversing this requires lower bureaucracy, stronger competitiveness, and renewed private investment.

Productivity means producing more value with available people, skills, technology, and capital. Value creation gives companies revenue to pay wages, invest in research, and expand. It also gives governments a stronger economic base from which public services and social standards can be funded. Without enough productive activity, those commitments become harder to sustain.

Kärcher illustrates the mechanism through innovation. The company invests heavily in cleaning robots, battery technologies, and digitalisation. More than 1,000 employees work in research and development. Such investment can improve products and efficiency, helping a manufacturer earn income in competitive international markets. That income supports employment and further investment.

Jenner argues that debt-funded growth, defence orders, and subsidies are not substitutes for a self-sustaining recovery in private investment. If firms cannot create value competitively, jobs and production weaken. His conclusion is that value creation must come before lasting prosperity and social standards, not after them.