Bosch Faces Potential Furloughs as Chip Dispute Deepens
Berlin, October 24, 2025:
Germany’s leading automotive supplier Bosch has warned that it may be forced to furlough workers at its Salzgitter plant if a growing trade dispute between China and the Netherlands over semiconductor manufacturer Nexperia is not resolved soon.
The standoff, which has already rattled Europe’s fragile automotive supply chain, stems from Beijing’s decision to ban exports of Nexperia’s finished chips in retaliation for the Netherlands’ move to seize control of the company.
Nexperia, a Dutch-based chipmaker owned by China’s Wingtech Technology, produces vital components used across car engines, control units, and electric vehicle systems. The escalating dispute threatens to choke the supply of these essential chips to European manufacturers just as the continent’s auto industry struggles with tariffs, supply chain instability, and the energy transition.
“We are doing everything we can to serve our customers and avoid or minimise production restrictions,” a Bosch spokesperson told Reuters, adding that contingency plans are being made at the company’s key Salzgitter facility.
Bosch Prepares Furloughs at Key Salzgitter Plant
While Bosch has not yet reduced working hours at its German operations, the company has begun preparing furlough measures for its 1,400-employee Salzgitter plant, which produces motor control units for both combustion and electric vehicles.
“We have not yet made adjustments to working hours, but are preparing to do so,” Bosch said, highlighting the uncertainty surrounding the chip supply.
Bosch’s contingency measures include securing alternative chip suppliers and optimizing global inventories to avoid immediate shutdowns. However, given that most Nexperia chips are manufactured in Europe but packaged in China, the supply chain remains vulnerable to export restrictions.
BMW, Mercedes, and VW Warn of Production Impact
Bosch isn’t the only major automaker feeling the strain. Industry giants BMW, Mercedes-Benz, and Volkswagen Group have all expressed concern that the ongoing Nexperia restrictions could soon disrupt vehicle production across their European plants.
A Volkswagen spokesperson said the company has secured production for the immediate term but warned that the situation remains “dynamic.”
“Short-term impacts on the production network cannot be ruled out,” Volkswagen said, adding that Porsche and other subsidiaries are closely monitoring chip inventories.
BMW and Mercedes echoed those concerns, warning of potential delays in component deliveries and urging political leaders to find a swift resolution to the trade standoff.
Union Sounds Alarm: “Severe Difficulties” for Auto Suppliers
Germany’s powerful IG Metall union has also voiced alarm over the situation.
Horst Ott, district manager for IG Metall in Bavaria, said that several auto suppliers are already experiencing “severe difficulties” and some have begun announcing furloughs for their workforce.
“The situation is worsening by the day,” Ott warned at an industry conference in Munich, without naming specific companies.
The union’s remarks highlight growing fears that the semiconductor shortage of 2021–2022 could repeat itself — only this time triggered by geopolitical tensions rather than pandemic-related disruptions.
Why the Nexperia Dispute Matters
The conflict centers on Nexperia, a key supplier of semiconductors for Europe’s automotive and electronics sectors.
Originally founded in the Netherlands, Nexperia became a subsidiary of China’s Wingtech Technology in 2019.
Earlier this month, the Dutch government seized control of Nexperia’s assets, citing national security concerns and alignment with US-led efforts to curb Chinese access to advanced semiconductor technologies.
In retaliation, China imposed an export ban on all Nexperia-finished products, halting the flow of components to European factories. The move has sparked fears of a semiconductor bottleneck that could cripple car production across the continent.
Industry sources told Reuters that while alternative suppliers such as Infineon, NXP, and Texas Instruments could fill the gap, switching production lines requires lengthy certification and approval processes — meaning disruptions could persist for months.
European Leaders Seek Political Solution
Recognizing the gravity of the situation, Dutch Prime Minister Dick Schoof discussed the Nexperia crisis with other EU leaders during this week’s European Council summit in Brussels.
EU officials are reportedly exploring diplomatic channels to mediate between Beijing and The Hague, with the goal of restoring chip exports and stabilizing automotive supply chains.
However, analysts warn that the conflict could become a flashpoint in the broader EU-China trade relationship, already strained by tariffs, technology bans, and mutual accusations of economic coercion.
“This is more than a trade spat — it’s a test of Europe’s ability to maintain industrial sovereignty while balancing relations with China and the US,” said one European trade expert.
What’s Next for the Auto Industry
Bosch’s warning underscores the fragile interdependence between global chipmakers and Europe’s automotive manufacturing base.
If the Nexperia export ban continues, analysts predict production delays, rising costs, and renewed pressure on EV manufacturing targets set by the EU.
In the short term, automakers will rely on existing chip inventories and alternative suppliers, but sustained disruption could force widespread temporary layoffs or reduced production schedules across Europe by early 2026.
For now, Bosch, BMW, Mercedes, and VW are all calling for urgent political action to de-escalate the dispute — a call echoed by unions, suppliers, and European policymakers facing another test of the continent’s industrial resilience.
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