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Post: Automatic location: “We must change”


Experts agree that the necessary measures to protect the global climate will change German industry. Automakers, in particular, are having a hard time.

Adam Tooze loves frankness. We met the British economic historian on the sidelines of a conference in Zurich last fall. For a documentation on Germany as a location, we needed some clear analysis. Where is German industry headed? How does the world look after Corona?

The honesty with which Tooze spoke was beyond relentless. There was something sarcastic about him: “Yeah, the Germans and their cars,” his gaze seemed to betray him before he bluntly said it to the camera:

You have a fetish there!

Economic historian Adam Tooze

Decline in manufacturing jobs in the automobile industry

At that time, the thesis that one should not shy away from the concept of deindustrialization in the autumn sounded somewhat unrealistic despite the tense situation in the world.

Today, when the ifo Institute in Munich talks about the “deindustrialization of the automobile industry” in a recent study, people are almost used to it. Professor Oliver Falck, an ifo economics expert, said in the ZDF interview:

Even if we continue to produce cars in Germany as before, far fewer people will work in companies.

ifo economist Oliver Falck

His research shows that since 2013 – long before the Corona crisis and the Ukraine war – manufacturing jobs in the auto industry have declined by nine percent.

Climate change is the biggest challenge for the auto industry

Economic historian Tooze warned of false hopes in a ZDFheute interview at the end of 2022: “It is not part of the nature of things that hundreds of thousands of people in Germany make a living by building cars”. A statement that seems like a threat to most of the nearly 800,000 employees in the automotive industry.

Geopolitical or fateful developments, such as war or pandemic, have a major impact on global markets and supply chains. But they are usually time-limited.

The much greater – because long-term – challenge is evident in the IPCC’s current world climate report. UN Secretary-General Antonio Guterres said in his presentation:

The climate time bomb is ticking.

Antonio Guterres, UN Secretary General

Many automobile manufacturers have long said goodbye to internal combustion engines.

“One thing is clear: we need to change,” says Professor Hermann Koch-Gröber of the “Scientists for Future” program at ZDF. “Germany was a leader in the construction of steam locomotives.”

The biggest leverage the automotive industry has is the electrification of the driver. Manufacturers still produce vehicles with internal combustion engines and electric motors in parallel. But it won’t stay like that. Despite the sometimes loudly expressed resistance to the impending combustion engine ban, BMW, Volkswagen and Co. strategically saying goodbye to this type of driving for a long time.

With the removal of double structures, the decrease in employment in production will accelerate even more.

Oliver Falck, economist at the Ifo Institute

USA and China lead in electric drives

Unlike the internal combustion engine, which German industry leaders have convinced each other of their ingenuity for decades, no one expected Germany when it comes to electric propulsion – quite the contrary. “With Tesla, the US now has the world’s largest producer on the market,” says ifo paper.

Chinese manufacturers such as BYD (“Build Your Dreams”) and SAIC are already among the top ten among the world’s largest electric car manufacturers. for the question Where the value creation of the future will take place in the automotive sector, Where When jobs are created (and not created), this statement is of central importance.

Control of electric motors as a future field?

Everyone knows that controlling the software, especially in electric cars, will be the point where everything will revolve in the future.

ifo economist Oliver Falck

According to ifo expert Falck, this could be an area where German automakers can regain lost ground.

“Companies have greatly increased employment in this field.” But Germany has to act faster than the electric drive here. Because competition – as in the case of Tesla – does not just threaten other automakers.

New competitors of the automobile industry: Google and IBM

If jobs are no longer primarily created by car assembly but by AI-based services like autonomous driving, then suddenly big tech companies like Google or IBM-Watson want a slice of the pie. Here is Oliver Falck’s explanation:

They didn’t bring their European headquarters here just for their humanity.

Oliver Falck, economist at the Ifo Institute

Germany is an exciting field of observation for these companies. Or maybe: guinea pigs?

In the end, this will depend on the automakers themselves. With battery manufacturing, software services and digital business models, they can make up for the ground they lost with hesitation and procrastination in recent years.

Source: ZDF

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