Volkswagen is a case study in self-destruction as a result of EU ‘climate’ politics and German auto company decision-making.  The decision to chase climate policy created European legislation that set quotas, limits and fines on automakers who did not shift to electric vehicles.  German automakers then chose to purchase carbon credits from China, who then use those sales to further discount exported EVs into the German market.

Simultaneously, Volkswagen opened up operation in China allowing their technology to be captured by Chinese auto makers who turned around and duplicated the technology at a much lower price.  Once the manufacturing was at full speed, China stopped purchasing Volkswagen autos.

The partly state-owned German automaker Volkswagen announced today [SEE HERE] their survival as a company now requires the elimination of 100,000 jobs in Germany with the closure of plants in Emden, Zwickau, Hanover and the Audi site in Neckarsulm.  Volkswagen will not be the last German company to suffer this fate as Mercedes is now 20% owned by Chinese EV company Geely.

The German auto workers do not have a choice. They no longer have a solid consumer base for their vehicles, and China continues to export low price EVs into the European market.  Every euro in tariffs against Beijing is offset by the euros the auto companies spend purchasing Chinese carbon credits to avoid European fines. They cannot get out of the spiral.

GERMANY – The car company Volkswagen has approved controversial plans to shed 100,000 jobs in a battle for survival as it faces fierce competition from Chinese rivals.

After the latest round of talks this week, the company announced a further 50,000 job cuts and agreed a staggered end to current production at four German plants: Emden, Zwickau, Hanover and the Audi site in Neckarsulm between 2031 to 2034. There are no specific plans beyond that.

The agreement came as a surprise after a meeting of shareholders, unions, and state representatives on the supervisory board in what was seen as a considerable test for the German carmaker’s chief executive, Oliver Blume.

He had gone as far as to arrange an emergency meeting if the package was rejected in preparation for a potential showdown with unions. (more)

In a directly related report, U.S. auto manufacturers are now urging congress to outright ban Chinese cars from the American market.  There are a few auto consumers who don’t like this approach, but it is entirely appropriate.

One of the things Europe will find out is that as soon as China has dominated their auto market, those cheap EVs will no longer be cheap.  Once Beijing captures the market, they will slowly start to increase the price extracting the maximum profit in the long-term strategy.

China would do this in North America if we do not protect the auto sector.  Ultimately, this is why Prime Minister Mark Carney is going to create a serious problem by allowing the import of Chinese EVs and letting them set up a manufacturing base in Canada.

It’s not just about cars.  If you lose your auto industry you erode your manufacturing base, your steel and aluminum production, your capacity to retain industrial engineering skills and many other ancillary aspects – including military.  The auto industry represents much more than just the production of consumer cars.

Europe, Southeast Asia, Africa and Australian markets have already fallen victim within this geopolitical scheme. Canada is on the cusp of the problem. Readers here are well aware of the scheme {GO DEEP}, and yes, it will take some form of legislative action to protect North America from this problem.

WASHINGTON DC – DETROIT — Major automakers operating in the U.S. are increasing pressure on Congress to permanently ban the domestic sale, import and manufacturing of Chinese connected vehicles, hardware and software.

The Alliance for Automotive Innovation, which represents the vast majority of companies selling vehicles in the U.S., urged congressional leaders in a Thursday letter to make a move before the end of Congress’ current session on Jan. 3.

“Right now, Chinese automakers are dumping subsidized vehicles with connected software and hardware around the world,” John Bozzella, CEO of the group, said in the letter seen by CNBC. “This hasn’t happened inside the U.S. yet, but given the scale and urgency of this threat, we urge you to enact a Chinese vehicle, software and hardware ban before adjourning this year and make this policy the law of the land.”

Midterm elections are also coming up in November, which could affect Congress’ momentum.

Bozzella’s comments come amid bipartisan efforts in the House and Senate to address Chinese vehicles, including legislation advanced by the Senate Commerce Committee that could bar Mercedes-Benz from the U.S. market because Chinese investors hold nearly 20% of the German automaker.

The Alliance for Automotive Innovation, which includes Mercedes-Benz, said in the Thursday letter that it wants to work with lawmakers to “achieve a balanced policy so all our member companies continue to succeed and thrive inside the U.S.”  (read more)

“Not on my watch”…

[FULL EXPLANATION WITH NUMEROUS INTERNAL CITATIONS HERE]