The heart of the European industrial economy is Germany, and there’s major trouble afoot within the largest industrial sector within Germany.
Following the “Build Back Better” agenda, the EU went all in for green energy proposals. EU banking and finance followed suit, funding investment capital for electric vehicles (EVs) to replace combustion engines. Unfortunately, this put the EU, specifically Germany, in the position of competing against the largest EV industrial base in the world, China.
The second major flaw was capital only flowing to the EV sector, and Europeans -along with the majority of the industrial west- are just not buying EVs at a production capacity to match prior investment.
Put it all together and Germany is trying to compete with China to produce a product their consumer base doesn’t want.
GERMANY – ZF Friedrichshafen’s announcement that it is cutting 7,600 positions adds to the German supplier industry’s troubles as parts makers struggle to manage the shift to EVs, along with falling demand for combustion engine components and increased competition from Chinese suppliers.
Including job losses at Volkswagen, Audi, and Porsche, the German auto industry is expected to eliminate nearly 100,000 jobs by 2030, according to an analysis by Bloomberg.
Bankruptcies among German suppliers are climbing sharply, with 30 percent more expected in 2025 compared with last year, according to a report from consultancy Falkensteg.
Between January and August, Falkensteg recorded 36 supplier bankruptcies, up from 33 the previous year. The report tracked suppliers with revenue of at least €20 million ($23.5 million) until 2024.
In the second quarter, the automotive supply and electrical engineering industries each recorded 11 corporate insolvencies, the highest number across all sectors, according to the survey, which was reported in Automotive News Europe’s sibling publication Automobilwoche. In the first quarter, 18 supplier bankruptcies were registered. (read more)
Against the simultaneous backdrop of major European countries banging Ukraine/Russia war drums, and against historic reference points, it is a little unnerving to hear about severe contraction within the German economy.
We have exclusively driven Mercedes and Audi vehicles over the past 20 years in our household, and we’d never consider other brands, but the quality and workmanship has definitely gotten worse.
We are happy buying used vehicles with 50,000 miles from both over the next 10 years until hopefully things can get straightened out.
Yes, build quality on the big Germans has been sacrificed for bling and e-toys in recent years.
We have newer Mercs. But I’m not letting go of our old R129 anytime soon. And it doesn’t spy on me like the new ones.
Bring back the turbo diesels.
I had a 5-cycliner turbo diesel Mercedes in 1984 – 300SD Turbo. In W.D.C., hardly got to drive it. Wish I still had it. Cruised at 80, got 19mpg
Had only 40K miles on it. It was a great car, sold it to my next oldest bro, who was a coutry club mgr in No. CA. He kept it only 40 days; he felt bad driving it among the club members. Made $8K, selliing in CA.
I have a 2012 VW Passat TDI – it regularly gets 48 mpg on highway runs, and in the mid-upper 30’s on short runarounds.
Diesel engines are more robust, and with proper maintenance,
can last much longer than gasoline engines.
As far as electrics… I hope to be still driving my diesel-engined, 2012 model, when today’s brand-new EVs are in the junkyard.
Me too! Until I had to replace the particulate filter at 220k miles. Couldn’t pass emissions without huge investment, and the New England rust is taking her slowly. Great car!!!
The other problem is German vehicles have dramatically dropped in quality and cost a fortune to service and repair.
Unnecessary complexity is never an asset and always a liability.
But it’s more than that.
There is not much incentive to build durable and serviceable cars and trucks.
The present design and engineering schemes demand the vehicle fails shortly after it is paid off.
And to make sure you don’t fix it, they intentionally make the repair so expensive in parts and labor to ensure you will throw it away and buy another.
Yes, our auto electrician informed me things are so complex now that the Dealer can’t even fix them, but they use the opportunity to sell you a new car.
I’d really like to see President Trump push a Model T like affordable functional vehicle before he leaves office.
Apparently the favored Nations (like China) have them, but we get all the stuff designed to rip a person off (thanks Ralph Nader).
Lots of emissions regulations are being overturned – those drive x lot of powertrain, electrical, transmission, and emissions equipment. NHTSA regs need to be looked at too.
I wish Ford would would reissue ‘32 coupes, as well as reissued but upgraded Cadillacs from 1920-1940, Cords, Auburns, Duesenbergs, Packards, and Brewsters.
So this is why they are beating the war drums? To give a boost to their ailing industries? Didn’t they try that before and it ended very badly?
They have tried it before, but this time is different.
All of Europe is already backing them this time.
A banker’s war. Follow the money.
Europe has learned from repeated successes that when the US gets into a “war”, everything gets blown up, but in the end, everybody gets rich again or taken care of. Great game so long as the US taxpayers remain stupid. Ukraine; being tested again, but the taxpayers are smelling shit, even after Trump’s 2 week promise.
The United States did not want a marriage between Germany engineering and Russian natural resources so we blew-up the Nordstream Pipelines! Unfortunately, German is run by woke Green Party idiots who applauded the destruction!
I don’t think that was the motive, if we even did it.
I’d like to know what the motive was for shipping the US-soybean -> China trade to Brazil…
For nothing?
Was that so China won’t sell our US bonds so fast? Or not invade Taiwan? Was the US perhaps threatened by Xi?
Brazil’s ecstatic. And Trump doesn’t even like Lula.
US sales are better.
https://insideevs.com/news/747173/bmw-2024-us-ev-sales-record/
I wouldn’t have an ev if ya gave me one but I would sell it to a greenee.😂
The last of the gullible took the bait while they could still get a federal subsidy and have their neighbors help pay for their new ride. Sales of EV’s in the US will drop like a stone now that people will have to pay full price and pay it themselves.
And The OBBB scrapped fleet average fuel rules for ICE vehicles so the price premium for EV’s is going to keep growing. There will be a niche market for EV’s among the same crowd that buys luxury sedans, but that’ll be it.
VW is helping to finance construction of the new Scout Motors facility in South Carolina.
It’s on 1000 acres… and is a billion+dollar project.
For EVs.
Should be finished in 2026.
I predict it will open – produce vehicles for perhaps 6 months (probably to satisfy any requirements for all the public monies expended by SC to facilitate its construction)…
And then
shut down,
Permanently.
Let the market decide!
You can’t have manufacturing without cheap energy. There’s no way around it.
You’ve got it.
In Kansas City, GM changed it giant car factory to produce electric cars and just laid off almost 1000 workers because nobody’s buying the Chevy bolt
Kansas City built internal combustion vehicles before, and can do so again.
Chevy Dolt. Fixed it for ya.😉
That last picture is worth thousands of words. Little children sitting behind a table decorated with childish idiocy. Small minds spilling their worthless platitudes upon the populations of their countries. Planned destruction of precious traditions for the sake of personal wealth and family fortune. None of these heads-of-state have the I.Q. necessary, nor the moral character to save their people from ruin. They don’t even want to. Evil.
GM was going down the EV-only path, too but seems to be reversing course. I hope they are successful or all the cars here will be Toyotas and Hyundais . . .
Or Yippie-I-O-KIAs.
I had-and got rid of- two BMW (Big Money Wasters).
My economist Dad taught me that the only real measure of performance for any car or truck that is used on the public roads and not a racetrack is cents per mile.
I’ll keep my old Impala, thanks.
Fire Mary Barra, she was hired by lightbringer
25 yr old CRV and 31 yr old Miata here. Still puttin’ along. New cookie cutter hatchbacks not for me.
Two Toyotas here. 2002 Camry and 2016 van. No problem plus there a gas station on every corner. They’ll both go 3-4 hundred miles on a tank. That’s one of the problems with EVs. No infrastructure to support them yet and the range has to be increased especially in cold weather. Most are not practical yet. Niche buyers and virtue signalers will buy them now but even that won’t last unless those things get exponentially better.
What if I said, “The heart of the U.S. industrial economy is Maine”? What would you think? You would laugh.
The per capita GDP of Germany, based in dollars, is $55,800,.
That is according to: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=EU
The per capita of Maine is $55, 144. Maine ranks about 40th of the 50 states
DC is usually included in the statistics, see here: https://www.statista.com/statistics/248063/per-capita-us-real-gross-domestic-product-gdp-by-state/
OK, Louisiana is closer with $55, 771. So Louisiana would also get a laugh.
So Germany would rank 38th or so among the US states.
Compare Arkansas at $47,989 to France at $46,150. France would rank 49th only ahead of Mississippi. So laugh.
There’s that year again, 2030. Looks like everything especially including the sh*t, is going to hit the proverbial fan in or before 2030. Just the way ‘they’ planned it all along….
Hang them all. Build back real.
I think the loss of jobs and private ownership of vehicles is a feature, not a bug, for the globalists.
From https://ukfires.org/industry/transport/ “We already have targets for phasing out non electric vehicles, but by 2050 will have only 60% of the electricity required to power a fleet equivalent to that in use today. Therefore we will either use 40% fewer cars or they will be 60% the size.”
Most of Europe is on the same model.
Here in my county in Washington state, the goal is all-electric and elimination of most privately owned vehicles. The idiots keep voting for the bureaucrats funding it and then complain that the roads are narrow, poorly repaired, and getting worse. Heaven forbid these people look at the local government website and actually read about the planned obsolescence of private vehicles (or about the smaller, denser housing unit they will be forced into).
” ….. Therefore we will
eitheruse 40% fewer carsorand they will be 60% the size.”There, fixed it for you.
I am pretty confident the true goal is to reduce humanity (aka ‘carbon’) to a “manageable” 500 million as stated on the Georgia Guidestones.
I believe you are correct flora.
Import more uneducated, low IQ Inbred 7th Century Savages.
That’ll fix everything.
Destroying the pipeline of inexpensive Russian gas via Nordstream is the main driver for the decline of German industrial output.
A nation cannot compete on industrial production without having cheap and reliable fuel.
Don’t dismiss the insane push to “green energy” and the shutting down of dozens of generation plants based on nuclear, oil, and gas.
They will try to force it harder.
Do they employ a lot of Turkish and Indians?
Or are their plants advanced like Tesla?
Germany isn’t even the first likely EU financial domino to fall – it’s why there are multiple members in the Group of the Swilling as Marcus calls it.
Karma
For too long Germany has been grifting from the Marshall Plan
‘A little unnerving’ yes a little sad as well to see whole societies bringing national suicide upon themselves.
I suspect Germany’s silence about the destruction of Nordstream may have had an effect on their economy.
The Germans are already turning some of those auto factories into armament factories. Germany has been waiting for the opportunity to re-arm militarily, and to shed its closeness to the U.S. Germany has never been a true ally to the U.S., in fact they hate us, they were glad the U.S. was willing to re-build their country for them at very little cost to Germany. Affairs in Germany today are similar to the way things were when Hitler came to power. A re-armed Germany is not a good thing.
You get what you tolerate and vote for. Get ready NYC because this tsunami of bad outcomes is coming your way soon.
How about we give 7,500 dollar subsidies for gas powered cars instead of EV’s. That market is about to tank. What kind of boom would America undergo if we did just that?
How about no spending of tax payer money for subsidies on any mode of transportation and instead greatly reduced the massive regulatory burden, which would save tax payer dollars for administration fees of the regulations and help lower production costs.
The last thing we want is “we are the government, and we are here to help you” – we want LESS government and government spending.
Like all communists believe, they were confident that they could command the people to go to net zero and drive EV cars by mandate. Most will go along if given enough financial incentive or if forced. In the long run this will fail. It always will. Communists will never understand this basic concept of freedom within the majority of the human soul.
I think Merz was put in office for the purpose of destroying his country while pretending to save it.
I have always had BMWs. My favorite was a 1992 BMW 535. I put 250,000+ miles on it. We lived in the mountains up winding roads. It was thrilling drive.I still have dreams of driving that car.
Porsche installs an un-oiled bearing inside the engines of 100,000 911s and Caymens. Audi puts the ECU under the wiper bottle, shorting out a $3000 part. VW cheats on emissions in a million cars, No sympathy, I will never need a $1000 alternator.
A great speech on the contemporary German situation, by a well-known German commentator speaking to a conservative Swiss audience. At min. 43-48 he discusses a recent secret meeting (no phones allowed) of VW management at which they were told that they were going full steam ahead with unwanted EV’s, in line with government wishes, but that they needn’t worry because they were going to make big profits starting next year supplying the Ukraine war effort.