The job cuts at VW and Conti are just the beginning
Electromobility is gaining more and more momentum. Tens of thousands of jobs in the German automotive industry are likely to be lost as a result. According to experts, manufacturers could catch up with the competition from abroad - but only under one "survival condition".
Volkswagen wants to cut its administrative personnel costs by a fifth, with 4,000 to 6,000 employees set to leave, mainly through partial retirement, according to the Handelsblatt. Continental is also cutting thousands of jobs worldwide in its automotive division, probably in the mid four-digit range. The Hanover-based company also wants to make savings, particularly in administration. According to industry experts, these are not isolated cases.
"I clearly expect job cuts across the entire automotive industry," says Stefan Bratzel, Head of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, in an interview with ntv.de. The reason: electric cars are becoming more and more widespread. Frank Schwope, lecturer in automotive economics at the Hanover University of Applied Sciences and Arts for SMEs, also told ntv.de: "The German car industry has to save, save, save."
Bratzel's assessment from five years ago that e-mobility would mean that around a fifth of the 800,000 jobs at car manufacturers and suppliers in Germany would no longer be necessary has not changed - that would be up to 160,000 jobs, plus jobs in the automotive trade and service. "That's what we're seeing now," says Bratzel. Significantly fewer people are needed to produce electric cars; the engine of a combustion engine has around 1000 components, around four times as many as an electric drive.
"In administration, you have to ask yourself how many people you need," says Bratzel. "Tesla can do it with significantly fewer than VW." In the production of German manufacturers, capacity utilization is currently not good. However, the expert does not believe that further major plant closures such as Ford in Saarlouis are imminent. Schwope expects that at least large car manufacturers will avoid compulsory redundancies. On the other hand, according to the experts, Chinese manufacturers can be expected to open plants in Europe, creating new jobs there. Schwope even believes it is conceivable that Chinese manufacturers could take over redundant plants from European producers.
VW must earn money with electric cars in order to survive
The fact that the new European Euro 7 emissions standard has been significantly relaxed could also play into the hands of German manufacturers. Combustion engines could sell better again as a result. "A lot also depends on political decisions," says Schwope.
In its current state - "too slow, too sluggish, too complicated" - VW brand boss Thomas Schäfer calls his own company "not viable". Bratzel also considers it a "condition for survival" that VW manages to earn money with battery-powered cars. The brand's returns are below average, both within the Group and compared to the competition, which makes the owner families and investors unhappy. "VW needs the money for investments," says Bratzel.
According to the industry expert, the biggest challenge for the Wolfsburg-based company is Tesla's price war; the US car manufacturer is expected to produce a model for 25,000 euros by 2025. "It will have to be ready by then at the latest," warns Bratzel. VW therefore needs to scour the entire value chain for potential savings: from raw materials and materials to design and production, not to mention administration.
Too expensive, not innovative enough
According to Bratzel, cost reductions are an important factor in becoming competitive again. However, the Germans also need to become more innovative again. "If you're not more innovative than the competition, you can't be more expensive either." VW is not bad, but also not better than its competitors - but more expensive.
Tesla in particular, but also Chinese manufacturers such as BYD, are becoming increasingly innovative. According to a recent analysis by Bratzel, Chinese manufacturers are more innovative than their German counterparts for the first time. According to Bratzel, the latter must become faster in implementing product ideas until they are ready for the market. "This also applies to the area of networking, where the Germans are progressing too slowly."
The competition has come to stay. Schwope expects 20 to 30 Chinese competitors to enter Europe in the next few years alongside the top dog Tesla - five to ten of which are likely to stay permanently. Just as Japanese manufacturers came in the 1970s and Korean carmakers in the 80s and 90s, almost all of whom stayed. The only difference is that there are significantly more companies from the much larger China - which is already a leader in e-cars. They cost less because they can be produced more cheaply in China. Chinese manufacturers may also pay less for raw materials. At a few hundred euros, transportation to Germany is hardly an issue.
"Herculean challenge" for German car manufacturers
German car manufacturers will not be able to match the prices of their Chinese competitors, Bratzel points out. E-cars from Germany would therefore have to score points with higher charging power and range or digital charging systems, for example. "They have to be at least as innovative as they are expensive, otherwise it won't work in the long term."
According to industry experts, German manufacturers can definitely become competitive again. "Absolutely - if they become competitive in battery cell technology and software and can translate their premium standards, which many customers also have, into e-mobility and the digital world," says Schwope. "I will still impress my neighbor more with a BMW or Porsche than with a BYD or Nio."
In Bratzel's eyes, however, German car manufacturers are facing a "Herculean challenge". They would have to do other things and do things differently. "Even the big names can't avoid this."
Volkswagen's shift towards electromobility comes with significant changes, as the company aims to reduce administrative costs by a fifth, resulting in 4,000 to 6,000 job cuts. Similarly, Continental is also planning to cut thousands of jobs worldwide within its automotive division.
The increasing popularity of electromobility has led experts to predict that around 160,000 jobs in the German car industry could be at risk. This is due to the fact that electric vehicles require fewer components and less labor than traditional combustion engine cars.
Source: www.ntv.de
