Published on January 13th, 2020 | by Steve Hanley0
Germany Could Lose 410,000 Auto Industry Jobs By 2030, Claims New Report
January 13th, 2020 by Steve Hanley
Germany’s National Platform For The Future Of Mobility (NPM) has released a report claiming the German auto industry could lose up to 410,000 jobs between now and 2030 due to changes in how people get from Point A to Point B in the future, particularly if more electric cars are being built instead of gasoline or diesel powered cars. That finding has been trumpeted in headlines around the world from Reuters to CNBC to The New York Times. But what’s behind those headlines? CleanTechnica decided to take a look.
Let’s begin by finding out who the NPM is and what it does. Here’s how it describes itself on its website.
Our mobility is undergoing transition and the next few years will bring major changes. Prosperity, growth and technological developments lead to a more mobile society and new mobility options. At the same time, achieving the German Federal Government’s energy and climate targets will be a central task in the coming years.
To shape this change, the Federal Government has convened the National Platform Future of Mobility. The aim of the NPM is to develop paths that cross and link modes of transport for a largely greenhouse gas-neutral and environmentally friendly transport system that enables efficient, high-quality, flexible, available, safe, resilient and affordable mobility in both passenger and goods transport.
Henning Kagermann, chairman of the steering committee for NPM, says, “We think of mobility in a holistic and cross-modal way — to show ways in which our transport system in Germany can be shaped to become climate-friendly, sustainable and affordable in the future while ensuring Germany maintains competitiveness as a place of production.”
Okay. Not a bunch of wild eyed radicals, but a group created by the German government to help it understand what the future might look like and how to plan for the changes that will come. Seems like a logical, reasonable, and appropriate way for the leaders of a great nation to behave.
Building On Past Research
In 2018, the Fraunhofer Institute and the Institute for Labor Market and Vocational Research issued reports suggesting employment in the German auto industry would decline significantly by 2030. Those studies started with the assumption that 25% of all cars manufactured in Germany by that date would be electric, with another 15% being plug-in hybrids.
But that assumption is too low if Germany is to meet its targets for emissions reductions from its transportation sector. So the latest projections now assume 30% of new cars will be battery electrics by 2030. Electric drivetrains have many less parts than internal combustion drivetrains and lend themselves to automated production.
Right now, about 270,000 German workers make engines and transmissions. NAB estimates the switch to electric cars will reduce that number by about 88,000, according to a report by Handelsblatt. But there’s more to making cars than drivetrains. It includes subcontractors and suppliers, metal stamping operations, and engineering staff. In an extreme case, 410,000 jobs are at stake as mobility changes occur, 240,000 of them in vehicle construction alone, according to the latest NPM report.
That’s why we have the blaring headlines. 410,000 Jobs Lost! And all because of those new-fangled electric cars! We must run and tell the king! The reality is more nuanced. The NPM predictions are based on all the possible changes in mobility including more ride-hailing and ride-sharing platforms and more autonomous vehicles.
The Rest Of The Story
The German Association of the Automotive Industry (VDA) sharply disagrees with the NPM analysis. “The assumption that up to 410,000 jobs could be lost in the coming years is based on an unrealistic extreme scenario,” Kurt-Christian Scheel, its managing director, tells Handelsblatt. He challenges the NPM assumption that the majority of electric cars and batteries for the German market will come from foreign countries. “These assumptions do not apply,” Scheel says.
The VDA does agree there will be far fewer jobs in engine and transmission assembly, however. The challenge is identifying new employment opportunities and restructuring business models, the NPM report suggests. “In order for Germany to remain strong as an automotive production location and to provide employment, important value-added networks for the drive technology of the future such as batteries, power electronics, fuel cells must be maintained or built as completely as possible in Germany and its European environment,” Henning Kagerman tells Handlesblatt.
The Volkswagen Example
Volkswagen is trying to stay ahead of the curve. While it will downsize some of its engine and transmission manufacturing operations, it is also ramping up its IT operations and expects to add 6,000 IT engineers in the next few years.
The only constant in life is change. Sometimes those changes can be painful. Not every person who carved spokes for wagon wheels found work in Henry Ford’s factories when the Conestoga wagon industry collapsed. Some governments are busy crafting ways to minimize the pain of technology change. Others are railing at the changes. Of the two approaches, Germany’s would seem to be the more preferable one.
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