Goodyear, Continental, Audi and more. What’s happening to the German auto industry?
Volkswagen is slowing down production of electric cars, Continental is undergoing restructuring and Goodyear is also closing two factories. What's happening to the German auto industry?
The slowdown of the German economy is now clear for everyone to see. According to the latest data from Ifo, the Institute for Economic Research, the percentage of companies at risk of survival has risen to 6.8%, with some sectors suffering more than others. Among these, the institute warns in the latest sampling, residential construction, as well as logistics and the chemical industry. But there is a sector that still escapes the latest statistical representations but is deteriorating rapidly: the German car industry.
GOODYEAR SAYS GOODBYE
The cause of all evils is always the same: the slowdown in demand. Even electric cars, which in Germany experienced a real baby boom last summer, thanks to the incentives, only to come to a brutal halt in September, with the end of the aid, especially with regards to the coverage of company fleets.
PREVIOUS
Among the companies undergoing restructuring is Goodyear, which has just announced its intention to close two plants in Germany: Fulda, in Hesse and Fürstenwalde, in Brandenburg. The Fulda workers were the survivors of the 2019 cuts, when the US multinational had let go of 450 workers, promising in exchange, local media recall today, massive investments for its modernisation. Last June, however, a new cut of 550 positions was announced, but the related negotiations with the works council seemed to have slowed down any decision.
THE ACCELERATION TOWARDS CLOSURE
In the last few hours, however, the leaders have once again pressed on the accelerator and this time announced the closure of the plant. This is due to the "significant and rapid deterioration" in demand, further "exacerbated by the increase in low-cost imports from Asia", Goodyear said, underlining that the divestment will be gradual and will take place within two years, with the closing of the gates in September 2025.
WHAT THE LEADERS SAY
Similar fate for the workers at the Fürstenwalde site, whose date of cessation of all activity will take place in 2027 and will include the dismissal of 750 workers. “It is a difficult decision, but necessary to reduce excess capacity and align our production structure with demand,” explained the American multinational, implying that consultations with workers' representatives will only be a ritual step.
CONTINENTAL IS ALSO NOT DOING WELL
That the German car industry has stopped racing is revealed by the fact that similar news also comes from the German Continental which is struggling with a restructuring program to allow the multinational active in the production of tyres, braking systems and control systems of vehicle stability, to save at least 400 million euros within the next two years. The plan, it is announced, will affect "all parts and all levels of the organization and, therefore, the exact number of jobs affected globally has not yet been decided". However, in the German press, which is following the dossier carefully, there is talk of five thousand positions, 3% of the current global workforce.
In short, the barometer is turning towards stormy weather for the employees of the German multinational, which has already laid off over 20 thousand workers in the last 10 years. Also because the head of the division Philipp von Hirschheydt without mincing words said that these are "initial measures to improve the competitiveness of the sector" and ongoing and "unreserved" evaluations of "all functions and processes, from sales to research, from development to production".
Therefore the thousand employees in around thirty sites affected by the reorganization could be the first of other cuts. The horse cure will lead to the liquidation of the Smart Mobility area and the consolidation of the entire division into just five business segments.
THE ENGINE OF THE GERMAN AUTO INDUSTRY IS COUGHING
The main emblem of the crisis facing the sector is above all the Volkswagen group which is reportedly considering, in the wake of Stellantis (which will leave workers in Italy and the USA at home), proceeding with a heavy cut of workers. According to the economic newspaper Handelsblatt, office workers are in the sights of the management grappling with a 10 billion spending review. The draconian plan, in fact, would be implemented through a reduction in administrative staff by at least 20%.
THE STOPS TO THE PRODUCTION OF ELECTRIC CARS
What is certain is that in recent days Volkswagen has decided on a three-week stop on the assembly lines of the new Model Years of ID.4, ID.5 and Q4 e-tron, both in SUV and Sportback versions. Officially the cause is to be found in the lack of electric motors, caused by unspecified "unexpected interruptions in supplies".
WHAT'S BEHIND?
However, there are those who point out that Volkswagen's conviction to continue investing in electric cars seems to be fading month after month, recalling that the group is reducing staff at its plant in the eastern German city of Zwickau (where six electric models of three brands of the group: Volkswagen, Audi and Cupra), due to the low demand for cars on tap, which collapsed in Germany after the end of government incentives which were no longer renewed. In fact, from September 1st, fleets were excluded from the group of beneficiaries of the benefits.
DISmissals of temporary workers
Of the 2,000 people who worked at the plant in August on temporary hires out of a total of approximately 10,700 employees, 269 were let go in October, when their contracts expired. This despite VW having reiterated on all occasions that the Zwickau plant would remain central to the German company's strategy despite the change at the top. After all, it is a gigafactory in which the German brand has invested 1.2 billion for the technical make-up.
AUDI ALSO PULLS THE PLUG
Furthermore, in the last few hours other stormy news has arrived from the German economic newspaper Handelsblatt , according to whose sources Audi has decided to postpone the launch not only of the Q6, but also of several other models of the e-tron family.
In short, the Ingolstadt company would prefer to wait for better times for the debut of the A6 and for the heir to the current Q8 e-tron. For once, behind the postponements there would not be dissatisfaction with the work in the Cariad software unit, but very specific industrial choices that would go in the opposite direction of the previous industrial plans .
CONCERNS ABOUT FORD'S MOVES?
Finally, there is also concern around the Ford plant in Cologne after the American company decided to slow down its European electricity plans, terminating agreements to build a gigafactory in Turkey .
At the beginning of the year, Ford had also announced important news for Germany, in particular for the Cologne plant, orphan of the best-selling Fiesta, which went out of production this summer. In the plans, the plant is destined to become the cradle of the Explorer electric SUV and, from 2024, of a second vehicle on tap, a sports crossover, the result of the industrial alliance started in 2020 with the Volkswagen group with the aim of assembling 1 .2 million electric cars over six years. But given that Volkswagen has also slowed down its electric plans , many are wondering whether the 2 billion dollars (1.8 billion euros) that Ford had allocated to Cologne for electric make-up will remain on the table.
It goes without saying that the mind turns to the already sealed fate of the Saarlouis plant, a reference factory in the south-west of Germany on the border with France since 1968, whose closure has already been decreed by Ford management and which now German politics matters of being able to rely on some Chinese brand to relocate the 4,600 employees who would otherwise end up at home.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/industria-auto-tedesca-che-succede/ on Sun, 26 Nov 2023 06:52:54 +0000.