Expert-Seminar - The transformation of the automobile industry in Germany

The transformation of the German car industry is gaining momentum – and increasingly taking shape. Will the fears that the switch to electric mobility will lead to the demise of what is possibly Germany’s most important key industry soon come true? Or will it all be half as bad after all? This week, almost 50 proven car-, climate- and macro-experts sought to answer this question at our seminar on the car turnaround. As it often happens, there is no unified opinion; yet, part of what is likely to come is clearly crystallised in almost all of the contributions.

Much suggests that the collapse will not happen. What speaks against it is the way in which companies like Volkswagen (VW) are now working on adjusting production, plans and strategies to battery-powered cars. At VW, plants are being converted to the new production during ongoing operations – with a simultaneous guarantee of location and employment for the employees. The same applies to large suppliers like ZF Friedrichshafen, where the dependence on the old combustion engine has long been reduced. On balance, according to current estimates, more jobs could be created than lost in the new car-world – if everything goes reasonably well. But even if that is the case – and we can only still rely on estimates – there are always two sides to such a balance.

On the minus side are those companies that have so far exclusively produced transmissions and engines that  are no longer needed in battery-powered cars – and for which it is not yet foreseeable what will come after, if only because their capacities are currently still well utilised. This threatens to become a major problem, especially when it comes to remote places where more than 1,000 out of 8,000 inhabitants work for the local supplier of the car industry – an economic and social catastrophe, as Jens Südekum explained at the event. In addition, if according to current projections the balance is positive, there is also the assumption that tens of thousands of employees will have to be retrained in the next few years – so that they are on the positive side. Certainly not an easy task.

In other words, even if such catastrophes do not materialize, the next two or three years will be about mobilising a lot more money and ideas to retrain a lot of people and develop new businesses – and, if necessary, to set up new industries in regions that are heading for the big bang; so that what once happened in the US car belt (today’s Rust Belt) doesn’t happen again, where an entire region went down, major cities had to declare bankruptcy – and many people later voted for Trump out of frustration. It’s high time for new ideas – and a much more sophisticated industrial policy. In the spirit of what Mariana Mazzucato has developed as mission-oriented policy.

You can find the presentation by Peter Mock (see also the clips below).