Electric cars costly for German workers
Industry could lose hundreds of thousands of jobs, writes Joe Miller
More than 400,000 jobs could be lost in Germany over the next decade as its auto industry shifts towards electric vehicles, according to a government-sanctioned report that underlines the wrenching change facing Europe’s largest economy.
In a worst-case scenario, Germany’s workforce could shrink by almost 1 per cent by 2030 if carmakers such as Volkswagen and Daimler are forced to rely on imports to meet targets for electric vehicle sales. The vast majority of vehicle batteries — the most valuable component of electric cars — are manufactured in Asia.
The rapid shift away from the combustion engine, spurred by increasingly stringent EU emissions regulations, will be “accompanied by a profound change in terms of value creation”, warns the study by a focus group from the National Platform on Future Mobility (NPM), which included executives from carmakers as well as suppliers such as Bosch.
“If we want to maintain industrial value creation and jobs in the local automotive industry, we will need the entire value chain to be here,” said Jorg Hofmann, chairman of Germany’s IG Metall union and head of the NPM working group.
The report comes at a time of deep gloom in the German car industry, as one of the pillars of the country’s export-led economy confronts the staggering cost of moving away from combustion engines.
Last year, German carmakers and suppliers announced more than 50,000 job cuts as the transition to battery-operated cars reverberated through the industry.
The caution from the NPM, an advisory body established by Angela Merkel’s administration, came just days before industry bosses were set to meet the German chancellor at the start of a critical year for the country’s carmakers. They face onerous regulations designed to spur a transition towards low-emission cars.
Hundreds of thousands of emission-free vehicles will have to be produced over the next 24 months, if Germany’s carmakers are to avoid billions of euros in fines from
Brussels.
The government wants the country’s automakers to produce up to 10 million battery-powered cars by the end of the decade. However, pure electric cars still account for just under 2 per cent of all new registrations in Germany.
The report also predicts that the assembly of electric vehicles, which contain far fewer components, will become more automated and require less manpower than the production of petrol or diesel models.
Last year cost-cutting by German carmakers contributed to a 1.3 per cent drop in the auto industry workforce, according to the Ifo economic institute, which said the transformation to electric vehicles was already weighing on the nation’s economy.
The country’s carmakers employ more than 800,000 directly and support 3 million jobs in the wider national economy.
The VDA, the association that represents Germany’s carmakers, criticised the NPM study for citing an “extreme scenario”. The VDA projected about 88,000 job losses over the same period.
“It is the joint responsibility of industry, trade unions and politics to promote reskilling so that negative effects on the labour market can be kept to a minimum,” said Christian Scheel, the VDA’s managing director.
Volkswagen’s Zwickau factory and Porsche’s Zuffenhausen assembly line have been partially converted into electric vehicle plants without any jobs being lost, largely due to the bargaining power of workers’ representatives, including IG Metall.
The union hailed NPM proposals for regional hubs to pool electric vehicle expertise, and measures to make it easier for workers to combine part-time work with training.
But it also urged the government to accelerate the installation of charging points and to consider other ecofriendly options for vehicles, including the use of synthetic fuels.