Volkswagen Group CEO Oliver Blume was booed by a crowd of 20,000 workers after stating that the corporate just isn’t “working in a fantasy world.” The corporate already noticed 100,000 union members walkout on Monday. “As administration we’re not working in a fantasy world. We’re making choices in a quickly altering setting,” Blume said. However the fantasy of local weather change is certainly what the corporate is working beneath.
Blume stated that Volkswagen should start to dump autos to Chinese language customers. Why would Chinese language customers by a European EV once they can buy a Chinese language mannequin for a fraction of the associated fee? I lately mentioned how even American auto CEOs have been praising the technological advances of Chinese EVs. China was as soon as a big marketplace for Germany’s auto exports however that has modified for the reason that authorities utilized numerous rules within the identify of local weather change.
Then Volkswagen had its emissions scandal the place it falsified emissions testing to promote to US customers. I wrote in 2015: “This occasion seems to focus on the turning level of 2015.75; in hindsight, we’ll in all probability look again at this turning level as the beginning of a severe financial decline that can strike Europe’s greatest economic system. The German automobile business is the biggest and what’s unraveling is a taint upon all German automobiles, which is unfair. This concerned diesel solely. Nonetheless, issues are by no means all the time honest.”
Now the corporate is seeking to lower pay for 120,000 staff. Working income have fallen by 11.4% they usually merely can’t proceed producing these EVs on the identical tempo they have been producing dreaded fuel-powered automobiles as a result of the demand just isn’t there. The federal government is actively stopping the auto business from flourishing. It’s a fantasy to imagine that the German auto business can proceed adhering to the nation’s local weather change targets that imagine it might scale back carbon emissions by 65% inside the subsequent 5 years.
But one more reason why all the European Union is dealing with a recession. Germany is the bread and butter of the EU – the financial powerhouse. You had 17% of all GDP in Germany derived from the auto business in 2023, and now the nation’s high auto producer is struggling to make a revenue.
China was a key participant for Germany. Germany offered 241,000 autos to China in 2023, marking a big portion of its market share at a price of €15.1 billion. Auto suppliers have been capable of promote some €11.2 billion to China final yr. At the moment, one in five cars on the road in China have been manufactured in Germany. But, China’s personal auto business grew 156% over a two-year interval from 2021 to 2023 after exporting 4.14 million autos final yr. China just isn’t adhering to the local weather change agenda, and those self same rules derived from fictional information should not strangling China’s energy-dependent sectors.
Chancellor Olaf Scholz known as China a “systemic rival,” however he did not acknowledge the federal government’s position in stifling the non-public sector. The German Chamber of Commerce in China performed a research this previous September that exposed half of the 566 surveyed companies deliberate to take a position extra closely into China. Solely 2% stated they might be prepared to dump their Chinese language operations, and seven% stated they have been contemplating a transfer away from China. As a substitute of engaged on open commerce, the entire Western nations have deemed China an unfriendly nation to be cautious of.
The transfer to finish local weather change is basically driving a stake via the very coronary heart of the German economic system and subsequently all the EU. The mercantile financial mannequin will proceed to break down beneath the fantasy world of local weather change. Whereas they might not scale back their carbon footprint, the Germany economic system is actually on observe to cut back its financial footprint within the years forward.
