Swiss Precision Machinery Sector Crisis: Auto Downturn and US Tariffs Impact K.R. Pfiffner

This analysis is based on the Reuters report [1] published on November 14, 2025, which documented the severe impact of automotive sector weakness and US trade policy on Swiss precision manufacturing.

K.R. Pfiffner, a Swiss precision machinery maker part of Taiwanese-owned FFG, is implementing drastic workforce reductions of 80 out of 105 employees (76% of staff) [1]. The company manufactures high-value equipment costing millions for major automotive clients including Mercedes-Benz and supplier Robert Bosch [1]. CEO Andreas Ewald stated that US tariffs “kill any business” and made exports 50% more expensive for American buyers [1]. The layoffs affect long-term employees like Norbert Steuer, 59, who faces unemployment after over three decades with the company [1].

The Trump administration imposed 39% tariffs on Swiss imports in August 2025, targeting Switzerland’s trade surplus with the US [3]. These tariffs have had a devastating effect on Swiss precision manufacturing, with Swiss tech industry exports to the US falling 14.2% in Q3 2025, while mechanical engineering exports dropped 24.8% [2]. Swissmem analysis indicates that at 39% tariffs, approximately 80% of US exports from the Swiss mechanical and electrical engineering sector (worth ~10 billion francs annually) would disappear [3].

The crisis highlights the deep integration between Swiss precision manufacturing and Germany’s automotive industry. German industrial companies shed over 114,000 jobs in the year through June 2025, more than four times the previous 12 months [1]. The automotive sector alone cut approximately 51,500 jobs (nearly 7% of its workforce) within one year [4][5]. Major companies including Bosch (13,000 layoffs), Mercedes-Benz, and Continental have announced significant job cuts [1].

K.R. Pfiffner’s situation demonstrates how precision machinery manufacturers sit at the critical intersection of automotive demand cycles and international trade policy. The company’s high-value, capital-intensive equipment makes it particularly vulnerable to economic downturns, as automakers typically defer such investments during market contractions [0].

FFG, Pfiffner’s parent company, has begun shifting some technology and production to US plants to mitigate tariff impacts [1]. This reflects a broader trend where nearly one-third of Swiss engineering firms are considering relocating operations to the EU to maintain market access [3], potentially leading to significant shifts in European industrial geography.

As of November 13, 2025, the US and Switzerland are close to reaching a deal that could reduce tariffs from 39% to 15% [6][7]. At 39% tariffs, 7,500-15,000 Swiss jobs are at risk, while a reduction to 15% would eliminate this threat [6]. Swissmem reports that Switzerland’s mechanical and engineering sector could lose around 30,000 jobs by end of 2026 if current tariffs remain [1].

• Trade Policy Volatility:
  The 39% tariffs have created an immediate competitive disadvantage for Swiss precision machinery versus EU-based competitors [0]
• Structural Industry Decline:
  The automotive industry’s transition to electric vehicles compounds traditional cyclical pressures, potentially creating longer-term demand challenges [0]
• Workforce Displacement:
  Workers like Norbert Steuer face age-related employment challenges in a tightening labor market, with Switzerland’s unemployment rising to 3% from under 2% in early 2023 [1]

• Trade Resolution:
  The potential US-Switzerland deal reducing tariffs to 15% could prevent 7,500-15,000 job losses and restore market access [6]
• Strategic Relocation:
  Companies shifting production to the US or EU may gain competitive advantages in the new trade environment [0]
• Market Consolidation:
  The crisis may create opportunities for well-capitalized firms to acquire distressed assets or market share [0]

• Immediate job losses: 80 at Pfiffner, with potential for 30,000 sector-wide losses in Switzerland by 2026 [1][3]
• German industrial employment decline: 114,000 jobs annually, with automotive sector accounting for nearly half [1][4]
• Trade impact: Swiss tech exports to US down 14.2% in Q3 2025, mechanical engineering exports down 24.8% [2]

• The tariffs have effectively doubled the cost barrier for American buyers of Swiss precision machinery [1]
• Companies are accelerating relocation strategies, potentially leading to long-term shifts in European manufacturing geography [3]
• The automotive sector’s dual challenge of cyclical downturn and EV transition creates sustained pressure on precision machinery suppliers [0]

• The US tariffs represent a strategic trade policy aimed at reducing the US trade deficit with Switzerland [3]
• The potential tariff reduction to 15% could mitigate but not eliminate competitive challenges for Swiss manufacturers [6]
• The situation underscores the vulnerability of specialized industrial sectors to trade policy volatility [0]