Germany seems to have strong unions and a strong auto industry, but the German economy as a whole has suffered decades of wage stagnation. One outperforming industry alone doesn't negate the broader correlation between restrictive labor laws, and degraded economic performance.

Also, Germany has many advantages in manufacturing that are independent of its labor laws, like a strong work ethic and tradition of engineering, good trade schools, etc. So an argument can be made that it has a strong tendency to be a manufacturing power that is capable of counter-acting the harmful effects of bad policies.

One possible indication that unionization has had a harmful impact on German economic development is if you look at Germany's past compared to its present you see that it developed more rapidly relative to its contemporaries before embracing the social-democratic/unionized-workforce model.