Kärcher boss calls for less regulation to revive Europe’s economy

Europe is facing a “perfect storm” of geopolitical crises that are casting a shadow over its economy, according to the head of cleaning equipment maker Kärcher. The family-owned company’s leadership warns that the United States’ unpredictable trade policy, including threats of tariff hikes and trade barriers without warning, creates a “toxic scenario for free global trade and export-oriented companies.” Meanwhile, China has transformed from a low-cost manufacturer into a “highly aggressive technological competitor” whose speed threatens to outpace key European industries in future-oriented fields.

Kärcher argues that China’s perceived technological supremacy is largely the result of targeted governmental industrial policy, including massive subsidies in key strategic industries and a currency policy artificially focused on competitiveness. This creates market distortions and overcapacity, making fair global competition “almost impossible” for market-based private companies. The imbalance is already visible in the loss of tens of thousands of industrial jobs and declining production volumes, with deindustrialization “happening right now.” Plant closures and production relocations are being negotiated in key German industries, including automotive and manufacturing.

A homegrown crisis

Kärcher, which employs 17,000 people worldwide and earns 86 percent of its revenue abroad, says even innovation leaders cannot withstand challenging operating conditions and unfair competition in the long term. The company itself is investing significantly in research and development, including autonomous cleaning robots, battery technologies, and digitalization. But a massive rise in structural and employee costs means expanding capacity or headcount in domestic production is “no longer economically feasible.” Germany’s latest economic forecasts expect growth to return to 1.3 percent this year, but Kärcher dismisses this as largely “borrowed growth,” artificially driven by special government funds, defense contracts, and subsidies.

The causes of weakness are “largely homegrown,” the company says, pointing to reform fatigue and a regulatory frenzy from Brussels to Berlin. The rise of political extremism is a sign that many people are calling for greater reliability and noticeable reforms. “If you rest, you rust – that applies to people just as much as it does to economies,” the company states. It calls for a “real fitness program for Germany,” arguing that rigid rules, excessive bureaucracy, high energy costs, and rising non-wage labor costs are “poison for our business environment.” Social security contributions consistently far exceeding the 40 percent threshold make tax breaks, subsidies, and special funds “ineffective paper measures.” While the federal government’s reform efforts are heading in the right direction, they fall far short.

Proposals for change

Kärcher proposes a cultural shift in the administrative system, envisioning government departments as digital enablers and service-oriented partners that are pragmatic, fast, and AI-supported. It notes that other countries are moving toward eliminating reporting obligations overall, signaling a direction for Germany and Europe. On the labor market, the company argues that demographic trends require an increase in the overall volume of work. It calls for incentives for overtime, flexible working hours, practical rules on continued pay during medical leave, and less bureaucracy when employing skilled workers. “Those who reflexively condemn such debates as an attack on workers’ rights are turning a blind eye to reality and putting precisely those jobs at risk that they claim to be protecting,” the company says.

At the European level, Kärcher demands a resolute trade policy that guarantees fair competition and punishes rule-breakers. Overall, the company wants less regulation, more personal responsibility, ambitious investment incentives, reliable framework conditions, and a can-do mentality. Founded in 1935 and based in Winnenden, Germany, Alfred Kärcher SE & Co. KG generated revenue of almost 3.5 billion euros in 2025.