Machine that's no good, being hidden by a German (6)
I believe the answer is:
engine
'machine' is the definition.
(engine is a kind of machine)
'no good being hidden by a german' is the wordplay.
'no good' becomes 'ng' (abbreviation).
'being hidden by' indicates putting letters inside (the outside letters hide the inside ones).
'a german' becomes 'eine' ('a' in German).
'ng' going inside 'eine' is 'ENGINE'.
'that's' acts as a link.
(Other definitions for engine that I've seen before include "Machine doing work" , "Mechanical device as source of power, a driver" , "eg Nine (anag.)" , "Machine supplying power" , "search, maybe" .)