Anabelle Colaco
16 Nov 2025, 09:28 GMT+10
UTZENSTORF, Switzerland: In a quiet Swiss village, a longtime machine maker is feeling the squeeze of global trade tensions and a flagging European auto market.
K.R. Pfiffner, a precision engineering company based in Utzenstorf, Switzerland, is laying off 80 of its 105 employees —a devastating blow for the community and a stark sign of how deeply U.S. tariffs and the auto sector's stagnation are cutting into Europe's industrial backbone.
"It was like a bomb went off," said Norbert Steuer, a logistics worker who's been at Pfiffner for over 30 years. The 59-year-old is among those set to lose his job next summer. "There's always talk about workers being sought, but are they going to want to hire a 59-year-old?"
Pfiffner manufactures million-dollar machines used by Mercedes-Benz, Robert Bosch, and other major players in the auto supply chain. The company had already been grappling with slowing demand when President Donald Trump announced 39 percent tariffs on Swiss-made machinery in August, severely impacting U.S. orders.
"That kills any business," said CEO Andreas Ewald. With a weaker dollar and steep tariffs, Pfiffner's products became around 50 percent more expensive for U.S. buyers almost overnight.
The situation reflects a broader crisis rippling through Europe's industrial heartlands. While Switzerland's unemployment rate remains low at three percent, it's up from below two percent in early 2023. According to industry body Swissmem, if the tariffs remain, 30,000 jobs in the country's mechanical and engineering sector could vanish by the end of 2026.
German industrial giants are facing similar challenges. In the 12 months through June, German companies cut over 114,000 jobs, four times as many as the previous year, according to a study by EY. A year earlier, they had created 65,000 jobs.
"It's something we've not seen in our lifetimes," said Volker Treier, foreign trade chief at the German Chambers of Industry and Commerce.
Companies like Bosch (13,000 layoffs), Mercedes-Benz, and Continental have announced significant cuts. Britain's job market is also cooling, and October saw the highest number of U.S. layoffs in over two decades.
Pfiffner's parent group, Taiwanese-owned FFG, has begun shifting some production to its U.S. plants to weather the trade storm, CEO Ewald said.
There is a glimmer of hope. Switzerland and the U.S. are reportedly nearing a deal that could reduce the tariffs, potentially easing pressure on exporters and saving jobs.
But for workers like Steuer, the damage is already being felt and spreading. "There's really a downward spiral right now everywhere," he said. "And what do people do then? They save money instead of buying a new car, TV, or phone. And on it goes."
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