Germany frets about economic car crash

Workers worried about shift to electric

BERLIN/STUTTGART, Germany, July 27, (RTRS): Daimler Chief Executive Dieter Zetsche beamed as he posed for cameras in a Mercedes-Benz electric car after meeting politicians to discuss the future of the auto industry in Stuttgart, birthplace of the combustion engine.

What the pictures do not reveal is that the Mercedes EQ car was a prototype that had to be dragged into the city square by four employees before the shoot.

Daimler’s EQ brand will only hit the road at the end of the decade. It’s a sign of how Germany has been slow to embrace electric vehicles and associated technology as it clings to the combustion engine that has driven its post-war prosperity.

“China dominates the production of solar cells. Tesla is ahead in electric cars and Germany has lost the first round of digitalisation to Google, Apple and the like,” said Winfried Kretschmann, who is premier of the region where Daimler is based and hosted the meeting with Zetsche and other car bosses.

“Whether Germany has a future as an industrial economy will depend on whether we can manage the ecological and digital transformation of our economy,” Kretschmann said.

Despite booming car exports and high employment in the industry, there is a sense of unease: “Is the car finished?” asked the weekly Die Zeit. “Fear in car country,” said Stern magazine.

Those fears have been mounting since the Volkswagen emissions scandal broke in 2015.

But the angst extends beyond cars to the broader economy, even though exports are booming and unemployment low. Politicians fear Germany is failing to invest enough in new technology and infrastructure.

Chancellor Angela Merkel has made preparing Germany for the digital age big part of her campaign for national elections on Sept 24, pledging to boost research and development spending.

Firmly

“I firmly believe that digitisation does not mean we will have fewer jobs per se,” Merkel said last month.

“If, however, jobs that are lost are not replaced by new jobs created by the management of large amounts of data ... then we will have problems,” she added.

Merkel is aware of the risks to Germany’s auto industry, noting that only one maker of horse-drawn carriages — US firm Studebaker — survived the invention of the modern car by German engineer Karl Benz 131 years ago.

“We must manage the move of today’s auto industry to the car of the 21st century better than the switch from horse power to the car,” she said in a speech in January.

Merkel’s main rival for the chancellery, Social Democrat (SPD) Martin Schulz, wants to compel the state to raise spending on infrastructure and education.

In the SPD election programme, the party says building up battery cell production in Germany is of “central strategic importance” to help the country remain the leading car maker.

In May, Merkel said Germany should do more to invest in battery research as she laid the foundation stone for a new Daimler battery factory in the town of Kamenz that will rely on imported cells.

Germany has fallen behind in developing the cells that are at the heart of electric vehicles, with most imported from Asia, and has also been slow to build charging stations, abandoning a target to have 1 million electric cars on the roads by 2020.

The country needs to spend between 50 to 80 billion euros on electric cars infrastructure, Rolf Bulander, a board member at auto supplier Bosch, told Reuters.

At Daimler’s Mercedes-Benz plant in Untertuerkheim outside Stuttgart, workers are still worried. In July, they refused to work overtime to push their demand for a commitment from Daimler to make components for electric cars at the factory.

“Our future here is closely tied up with the future of the powertrain. That is why it is important to pave the way for the future today,” said Wolfgang Nieke, head of the works council at the factory.