风萧萧_Frank
以文会友
欧洲经济引擎正在熄火
https://www.politico.eu/article/rust-belt-on-the-rhine-the-deindustrialization-of-germany/?
莱茵河畔的锈带
德国的去工业化：如果欧洲的经济引擎停滞，欧洲大陆本已两极分化的政治格局将会颤抖。
作者：马修·卡尼奇尼格 (MATTHEW KARNITSCHNIG)，2023 年 7 月 13 日于柏林
柏林——德国最大的公司正在离开祖国。150多年来，化工巨头巴斯夫一直是德国商业的支柱，以源源不断的创新支撑着德国工业的崛起，让“德国制造”令世界羡慕不已。
但其最新的登月计划——投资 100 亿美元建造最先进的综合设施，该公司声称这将成为可持续生产的黄金标准——并没有在德国实施。 相反，它是在 9,000 公里之外的中国建造的。
巴斯夫于 1865 年在莱茵河畔成立，当时名为 Badische Anilin- & Sodafabrik，在追逐亚洲未来的同时，它也在德国缩减规模。 2月份，该公司宣布关闭其家乡路德维希港的一家化肥厂和其他设施，导致约2600人裁员。
巴斯夫首席执行官马丁·薄睦乐 (Martin Brudermuller) 在 4 月份对股东表示：“我们越来越担心我们的国内市场。”他指出，该公司去年在德国损失了 1.3 亿欧元。 “盈利能力已不再接近应有的水平。”
这种萎靡不振现在遍及整个德国经济，一系列调查显示企业和消费者都对未来深感怀疑，德国经济在第一季度陷入衰退。
这种担忧是有根据的。 近20年前，德国通过一系列雄心勃勃的劳动力市场改革，摆脱了“欧洲病夫”的名声，释放了其工业潜力，迎来了持续的繁荣时期，尤其是在对其机械和汽车的强劲需求的推动下 来自中国。 尽管德国的出口量远远超过购买量，令许多合作伙伴感到沮丧，但其经济却蓬勃发展。
然而，繁荣时期是有代价的：经济实力让领导人陷入了错误的安全感。 他们未能推行进一步的改革现在又受到了影响。
突然之间，一场完美风暴正在这个前欧洲强国酝酿，这表明其当前的衰退不仅仅是政策制定者所祈祷的“技术性”衰退，而是经济命运根本性逆转的先兆，有可能给整个欧洲带来震动，给整个欧洲带来震动。 欧洲大陆本已两极分化的政治格局更加剧变。
面对高能源成本、工人短缺和大量繁文缛节的有毒混合物，许多德国最大的公司——从大众和西门子这样的巨头到许多鲜为人知的小公司——正在经历猛烈的觉醒，并争先恐后地寻求更环保的解决方案。 北美和亚洲的牧场。
如果没有出现意外的好转，我们很难避免得出这样的结论：德国经济将走向更严重的衰退。
来自前线的报道只会变得更糟。 6月份失业率同比增加约20万人，这是企业通常增加就业岗位的月份。 尽管总体失业率仍处于 5.7% 的低位，职位空缺数量高达近 80 万个，但德国官员正准备迎接更多坏消息。
德国劳工局局长安德里亚·纳勒斯表示：“我们开始感受到劳动力市场困难的经济状况。” “失业率正在上升，就业增长正在失去动力。”
长期以来一直是德国企业健康状况风向标的德国工程公司的新订单大幅下降，仅 5 月份就下降了 10%，这是连续第八次下降。 从建筑业到化工行业，德国经济也存在类似的疲软现象。
外国对德国作为投资地的兴趣也在减弱。 2022年德国新增外资数量连续第五年下降，创2013年以来最低点。
BVMW 首席经济学家汉斯-尤尔根·沃尔茨 (Hans-Jürgen Völz) 表示：“有时人们会听到‘缓慢的去工业化——嗯，它不再只是缓慢地进行了。’该协会为德国中小型企业进行游说，而中小型企业组成了德国中小型企业。 国家经济的支柱。
当德国打喷嚏时……
要了解去工业化的长期影响，我们只需看看美国的铁锈地带或英国中部地区，它们曾经繁荣的工业走廊，后来成为政策失误和全球竞争压力的受害者，并且从未完全恢复。
只有德国，其后果才会在整个大陆范围内显现。
该国对工业的依赖使其特别脆弱。 除了软件制造商 SAP 之外，德国的科技行业基本上不存在。 在金融界，最大的参与者最出名的是做坏事
赌注（德意志银行）和丑闻（Wirecard）。 制造业约占其经济的 27%，而美国这一比例为 18%。
一个相关的问题是，德国最重要的工业部门——从化学品到汽车再到机械——都植根于 19 世纪的技术。 虽然德国通过优化这些产品实现了数十年的繁荣，但其中许多产品要么已经过时（内燃机），要么在德国生产成本太高。
以金属为例。 今年三月，拥有德国最大铝冶炼厂 Uedesheimer Rheinwerk 的公司表示，由于能源成本高昂，将在年底前关闭该工厂。
如果德国有着悠久的经济多元化历史，那么此类报告就不会那么令人担忧。 不幸的是，它在这方面的记录充其量是不完整的。
例如，德国率先开发了现代太阳能电池板技术，并在 2000 年代初成为世界上最大的生产国。 然而，在中国抄袭德国设计并用廉价替代品充斥市场后，德国太阳能电池板制造商崩溃了。
在生物技术领域，总部位于美因茨的 BioNtech 公司是 mRNA 疫苗开发的前沿公司，事实证明，该疫苗对于帮助世界战胜 COVID-19 大流行至关重要。 但在这一成功的背后，该公司于一月份宣布了其创始人所说的在英国尖端癌症研究方面进行“巨额”投资的计划。
……欧洲感冒了
创新带来经济增长，而随着德国传统工业的衰落，问题是什么大的新事物将取代它。 到目前为止，还看不到任何东西。
德国在联合国世界知识产权组织编制的年度全球创新指数中仅排名第八。 在欧洲，它甚至没有进入前三名。
许多观察家认为人工智能技术将推动下一代经济增长，但在人工智能领域，德国已经落败。 2022 年，在人工智能领域被引用最多的 100 篇科学论文中，只有 4 篇是德国论文。 相比之下，美国为 68，中国为 27。
德国 DIW 经济研究所所长马塞尔·弗拉茨舍尔 (Marcel Fratzscher) 表示：“德国在任何最重要的面向未来的领域都没有什么可提供的。” “存在的是旧工业。”
比较德国和美国过去 15 年的发展轨迹，技术改变经济或将其抛在后面的力量显而易见。 在此期间，美国经济在硅谷繁荣的推动下增长了 76%，达到 25.5 万亿美元。 德国经济增长 19%，达到 4.1 万亿美元。 以美元计算，美国同期经济增长相当于近三个德国。
保时捷在斯洛伐克生产一些最畅销的汽车 托马斯·金茨勒/法新社，盖蒂图片社
德国工业核心的侵蚀将对欧盟其他国家产生重大影响。 德国不仅是欧洲最大的参与者，也是欧洲最大的参与者。 它还发挥着车轮轮毂的作用，将该地区的不同经济体联系起来，成为其中许多经济体最大的贸易伙伴和投资者。
过去三十年来，德国工业已将中欧变成了自己的工厂车间。 保时捷在斯洛伐克生产最畅销的卡宴 SUV，奥迪自 20 世纪 90 年代初以来一直在匈牙利生产发动机，高端电器制造商 Miele 在波兰生产洗衣机。
数以千计的德国中小型企业（即构成该国经济支柱的所谓中小型企业）活跃在该地区，主要为欧洲市场生产产品。 虽然它们不会在一夜之间消失，但德国的持续衰退将不可避免地拖累该地区其他国家。
汽车零部件制造商舍弗勒(Schaeffler)首席执行官克劳斯·罗森菲尔德(Klaus Rosenfeld)最近承认，“欧洲最终有可能成为这一转变的输家。”他补充说，他的公司可能会在美国建造下一家工厂。
不足之处
尽管欧盟官员将该地区迫在眉睫的去工业化归咎于美国和中国的不公平政策，这些政策使欧洲公司处于不利地位，但德国的问题要严重得多，而且主要是内部造成的。 而且他们没有简单的解决办法。
简而言之，让德国成为欧洲工业强国的模式——高技能劳动力和廉价能源驱动的创新公司——已经失效。
随着婴儿潮一代在未来几年退休，德国正加速走向人口悬崖，这将使其公司失去在全球市场上保持竞争力所需的工程师、科学家和其他高技能工人。 未来 15 年内，约 30% 的德国劳动力将达到退休年龄。
人口老龄化并不是唯一的问题。 德国年轻人渴望安全的工作，而不是使该国成为世界领先经济体之一的创业和发明的坎坷。
密斯。
DIW 的 Fratzscher 表示：“许多年轻人宁愿为国家工作，也不愿创业。”
通过移民来弥补日益严重的劳动力短缺的努力迄今为止都失败了。 （尽管德国每年继续接纳数十万寻求庇护者，但大多数人缺乏公司所需的技能。）
上周，德国立法者通过了一项新的移民法，消除了外国技术工人在该国定居所面临的许多官僚障碍。 是否有效是另一个问题。 与英国、加拿大或美国相比，由于高税收、学习语言的困难以及通常不太欢迎外国人的文化，德国往往很难推销。
例如，上个月发表的一项由政府委托进行的近 400 页的研究发现，一半的德国人怀有反穆斯林观点。 鉴于政府希望吸引来自土耳其等穆斯林国家的许多受过高等教育的工人，这种敌意很难成为卖点。
俄罗斯对乌克兰的战争以及德国自身应对气候变化的努力导致能源成本飙升，加剧了这些人口挑战。
通过停止向德国供应天然气，克里姆林宫有效地消除了该国商业模式的关键，该模式依赖于轻松获得廉价能源。 尽管天然气批发价格最近已趋于稳定，但仍约为危机前的三倍。 这使得像巴斯夫这样的公司别无选择，只能寻找替代品。仅巴斯夫在德国的主要业务在 2021 年消耗的天然气就相当于整个瑞士的天然气消耗量。
该国的绿色转型，即所谓的能源转型，只会让事情变得更糟。 就在失去俄罗斯天然气供应的同时，该国关闭了所有核电。 即使在补贴可再生能源扩张近四分之一个世纪之后，德国仍然没有足够的风力涡轮机和太阳能电池板来满足需求——这使得德国人支付的电费是国际平均水平的三倍。
达斯·奥托之死
尽管广大公众似乎幸福地没有意识到即将面临的经济挑战，但前线的人们并不抱有任何幻想。
“地缘政治的发展已经非常清楚地表明，我们的经济模式不再是繁荣的保证，”该行业主要游说机构德国汽车工业协会常务董事安德烈亚斯·拉德(Andreas Rade)表示。
das Auto 也不是。
一个多世纪以来，汽车工业一直支撑着德国的命运，该国的经济未来在很大程度上取决于该行业（占其总产值的近四分之一）在当今世界中维持其在豪华车领域的地位的能力。 电动汽车。
看起来不太好。 尽管这些公司最近在大流行后被压抑的需求的帮助下实现了创纪录的利润，但这种提振看起来更像是最后一口气，而不是复兴。
汽车工业长期以来一直是德国民族自豪感的源泉，但它已成为德国的阿喀琉斯之踵，其原因更多地与傲慢有关，而不是该国的结构性缺陷。 多年来，梅赛德斯、宝马和大众等公司拒绝放弃内燃机，将特斯拉和其他早期创新者视为昙花一现。
这一战略失误不仅为埃隆·马斯克（Elon Musk）打开了大门，也为中国打开了大门，中国在 15 年前就开始在电动汽车开发上投入大量资金，当时德国人对这个想法嗤之以鼻，以建立实质性领先地位。 去年，全球销售的超过 1000 万辆全电动汽车中，中国生产商约占 60%。
德国人已经感受到了他们误判的影响。
由于电动汽车销量激增，几十年来一直主导中国汽车市场的大众汽车在第一季度将中国最大汽车制造商的桂冠让给了当地竞争对手比亚迪。 中国是全球最大的汽车市场，占大众汽车收入的近40%。
保险公司安联最近的一项研究预测，如果目前的趋势持续下去，中国制造商在中国和欧洲的市场份额不断增加，那么到 2030 年，欧洲汽车制造商和供应商的利润可能会减少数百亿欧元，其中德国公司首当其冲。
尽管德国汽车制造商已经对电动汽车进行了集体散兵坑改造，并正在竞相追赶，但他们仍然缺乏一个多世纪以来在内燃机方面享有的竞争优势。 事实上，电动汽车的关键技术不是电机（这是现成的技术），而是电池，它依赖于化学，而不是定义 Vorsprung durch Technik 的机械工程实力。
更重要的是，电动汽车正日益演变成滚动的科技娱乐胶囊，自动驾驶汽车指日可待。 如果有 o
德国在数字技术方面还没有表现出色。 这或许可以解释为什么特斯拉现在的市值是所有德国汽车制造商总和的三倍多。
中国德国商会会长延斯·希尔德布兰特 (Jens Hildebrandt) 表示：“德国工业确实面临着创新困难和竞争力问题。”
对于德国和中国之间的经济关系来说，这代表着巨大的变化。 几十年来，中国人将德国工业和工程视为典范。 突然之间，德国人把目光投向了中国。
希尔德布兰特表示：“中国大型汽车公司很快将不得不在欧洲甚至德国建立自己的工厂。”他补充说，这是一个“无法逆转”的趋势。
下降通道
考虑到经济逆风，许多德国最大的公司正走上名义上的德国之路，这也许并不奇怪。
如果这听起来有些牵强，请考虑一下工业气体集团林德的例子。 直到今年，这家于 1870 年代开始为啤酒厂开发制冷设备的公司仍是德国最有价值的蓝筹股，市值约为 1500 亿欧元。 一月份，该公司决定退出法兰克福证券交易所，转而在纽约上市。
在此之前，该集团于 2018 年与一家美国竞争对手合并，之后决定放弃慕尼黑市中心总部，迁往都柏林。 在重组过程中，林德在本国裁减了数百个工作岗位。 尽管德国仍然是一个重要市场，约占收入的 11%，但它只是众多市场之一。
林德所说明的是，无论有没有德国，德国大公司都可以生存和发展。 当祖国的情况恶化时，他们就会搬到其他地方。 然而，对德国来说，这将意味着高薪工作岗位减少和税收收入减少，更不用说经济持续衰退和政治不稳定的威胁。
极右翼德国另类选择党 (AfD) 最近在全国民调中的民意调查激增凸显了这些风险。 尽管德国选择党的崛起是由于对移民问题日益不满，但持续的经济恐慌可能会给该党带来进一步的推动。
德国极右翼政党另类选择党最近在全国民意调查中飙升 马蒂亚斯·里切尔/盖蒂图片社
一大亮点将是社会福利。 德国是福利最慷慨的国家之一，去年社会支出占经济的 27%（而美国为 23%）。 由于柏林面临着大幅增加国防开支的压力，紧缩开支——以及公众的强烈反对——已经开始。 在经济衰退的情况下，情况只会变得更糟。
德国工业的首要任务——德国破旧的基础设施的现代化——将更加难以融资。 德国的道路、桥梁、航道和其他关键基础设施急需维修。 德国经济研究所 (IW) 11 月发布的一项研究显示，五分之四的德国公司表示基础设施薄弱阻碍了他们的业务。 振兴工作在破土动工之前需要克服监管障碍，这意味着没有快速解决办法。
事实上，“问题可能会变得更糟，”该研究的作者总结道。
出埃及记
德国工业并没有完全放弃德国。 他们很乐意留下来——只要政府付钱给他们。
巴斯夫两周前在德累斯顿附近开设了一家工厂，生产电动汽车电池的阴极材料，并承诺继续投资其国内市场。 然而，为了确保这些承诺，地方和联邦政府被迫提供慷慨的激励措施。 例如，巴斯夫将为其新电池业务获得 1.75 亿欧元的政府支持。
同样，6 月份，美国芯片制造商英特尔获得了令人垂涎的 100 亿欧元补贴，用于在东部城市马格德堡建造一座大型新工厂。 这相当于该公司承诺创造的 3,000 个就业岗位中每个岗位的投资额为 330 万欧元。
如果没有这样的支持，更实惠的市场的诱惑就难以抗拒。 随着德国工程技术在电动时代失去优势，汽车制造商正在加倍加大海外投资，尤其是在中国或美国——它们都熟悉利用税收优惠和补贴来吸引投资者。
事实证明，美国《通货膨胀削减法案》提供的资金极具吸引力。 大众汽车今年 3 月公布了在南卡罗来纳州建造一座耗资 20 亿美元的工厂的计划，希望在那里重振 Scout 品牌，这是 60 年代和 70 年代流行的美国 4×4 品牌。
4 月，汽车制造商电池初创公司 PowerCo 的高管与加拿大总理贾斯汀·特鲁多 (Justin Trudeau) 一起宣布投资 50 亿欧元在安大略省建造一家新电池工厂。 该汽车制造商承诺未来几年将在北美增加数十亿美元的投资
转向电动汽车已经过去了整整一年。
相比之下，在德国，大众汽车放弃了为新型电动SUV“Trinity”建造新工厂的计划，而是选择重组现有设施。 这家拥有奥迪和保时捷等稳定品牌的汽车制造商，由于电力成本高昂，决定不在其家乡下萨克森州建造第二座电池厂。 然而，今年 4 月，该公司宣布将投资约 10 亿欧元建设上海附近的电动汽车中心。
行业组织 VDA 最近对 128 家德国汽车供应商进行的一项调查发现，没有一家公司计划增加在本国市场的投资。 超过四分之一的人计划将业务转移到海外。
尽管该国出现了工业外流，但德国政界人士在很大程度上否认迫在眉睫的政治和经济挑战。
行业游说者认为，从长远来看，中国和德国之间的“相互依存”将是积极的，但类似的逻辑促使柏林拥抱俄罗斯天然气，并带来了灾难性的后果。 没有迹象表明德国对中国的推动正在减弱。 去年，德国企业在华投资达115亿欧元，创历史新高。
“令我担心的是依赖性的不对称性，”弗拉茨舍尔说。 “德国企业已经向敲诈勒索敞开了大门，因为它们对中国的依赖程度比对中国的依赖程度高得多。”
想要了解国家冠军企业能够以多快的速度被技术席卷，他们最好打电话到芬兰询问诺基亚，或者打电话到加拿大询问 Research in Motion 的命运，这家曾经是移动科技背后的公司。 无处不在的黑莓手机。
总有一天，德国人会意识到他们所面临的危险。 问题是他们是否会在为时已晚之前采取行动。
无论哪种方式，巴斯夫都会做好准备。 最近，当被问及该公司计划如何处理即将关闭的德国中心化工厂时，薄睦乐首席执行官试图软化态度，表示该公司不会“立即拆除所有工厂”。
但他在另一点上更为直接：“我们目前不需要路德维希港的空间。”
加布里埃尔·里纳尔迪和彼得·威尔克贡献了报道。
更正：本文的早期版本错误地命名了《减少通货膨胀法案》。
Europe's economic engine is stalling
https://www.politico.eu/article/rust-belt-on-the-rhine-the-deindustrialization-of-germany/?
Rust Belt on the Rhine
The deindustrialization of Germany: If Europe's economic motor stalls, the Continent's already polarized political landscape will shudder.
By MATTHEW KARNITSCHNIG in Berlin JULY 13, 2023
BERLIN — Germany's biggest companies are ditching the fatherland.
Chemical giant BASF has been a pillar of German business for more than 150 years, underpinning the country’s industrial rise with a steady stream of innovation that helped make “Made in Germany” the envy of the world.
But its latest moonshot — a $10 billion investment in a state-of-the-art complex the company claims will be the gold standard for sustainable production — isn’t going up in Germany. Instead, it’s being erected 9,000 kilometers away in China.
“We are increasingly worried about our home market,” BASF Chief Executive Martin Brudermüller told shareholders in April, noting that the company lost €130 million in Germany last year. “Profitability is no longer anywhere near where it should be.”
Such malaise now pervades the whole of the German economy, which slipped into a recession in the first quarter amid a flurry of surveys showing that both companies and consumers are deeply skeptical about the future.
That concern is well founded. Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms that unshackled its industrial potential and ushered in a sustained period of prosperity, driven in particular by strong demand for its machinery and cars from China. While Germany frustrated many partners by exporting vastly more than it was buying, its economy flourished.
The boom times, however, came with a cost: The economic strength lulled its leaders into a false sense of security. Their failure to pursue further reforms is now coming back to bite.
Suddenly, a perfect storm is brewing over the former European powerhouse, signaling that its current recession isn’t just “technical,” as policymakers pray, but rather a harbinger of a fundamental reversal in economic fortunes that threatens to send tremors across Europe, injecting even more upheaval into the Continent’s already polarized political landscape.
Absent an unexpected turnaround, it’s hard to avoid the conclusion that Germany is headed for a much deeper economic decline.
The reports from the front lines are only getting worse. Unemployment rose year-on-year by about 200,000 in June, a month when companies normally add jobs. Though the overall unemployment rate remains low at 5.7 percent and the number of job vacancies high at nearly 800,000, German officials are bracing for more bad news.
“We’re beginning to feel the difficult economic conditions in the labor market,” German labor office head Andrea Nahles said. “Unemployment is rising and employment growth is losing momentum.”
“One sometimes hears about ‘creeping deindustrialization — well, it’s not just creeping anymore,” said Hans-Jürgen Völz, chief economist at BVMW, an association that lobbies for Germany’s Mittelstand, the thousands of small- and medium-sized firms that form the backbone of the country’s economy.
When Germany sneezes …
To understand the long-term effects of deindustrialization, one needn’t look further than America’s Rust Belt or the U.K.’s Midlands, once thriving industrial corridors that fell victim to policy missteps and global competitive pressures and never fully recovered.
Only with Germany, the consequences would play out on a continental scale.
The country’s reliance on industry makes it particularly vulnerable. With the exception of software maker SAP, Germany’s tech sector is essentially non-existent. In the financial world, its biggest players are best known for making bad bets (Deutsche Bank) and scandal (Wirecard). Manufacturing accounts for about 27 percent of its economy, compared with 18 percent in the U.S.
A related problem is that Germany’s most important industrial segments — from chemicals to autos to machinery — are rooted in 19th-century technologies. While the country has thrived for decades by optimizing those wares, many of them are either becoming obsolete (the internal combustion engine) or simply too expensive to produce in Germany.
Such reports would be less worrying if Germany had a strong history of economic diversification. Unfortunately, its track record on that front is patchy at best.
Germany pioneered modern solar panel technology, for example, to become the world’s largest producer in the early 2000s. After the Chinese copied the German designs and flooded the market with cheap alternatives, however, Germany’s solar-panel makers collapsed.
In biotech, Mainz-based firm BioNtech was as the forefront of the development of the mRNA vaccine that proved crucial in helping the world overcome the COVID-19 pandemic. But on the back of that success, the company announced plans in January for what its founder called a “huge” investment in cutting-edge cancer research — in the U.K.
… Europe catches a cold
Innovation begets economic growth and as Germany’s traditional industry declines, the question is what big new thing will replace it. So far, there’s nothing in sight.
Germany ranks only eighth in the Global Innovation Index, an annual ranking compiled by the U.N.’s World Intellectual Property Organization. In Europe, it’s not even in the top three.
“Germany has nothing to offer in any of the most important future-oriented sectors,” said Marcel Fratzscher, the head of Germany’s DIW economic institute. “What exists is old industry.”
The power of technology to transform an economy — or leave it behind — is apparent when comparing the trajectories of Germany and the U.S. over the past 15 years. During that period, the U.S. economy, driven by a boom in Silicon Valley, expanded by 76 percent to $25.5 trillion. Germany’s economy grew by 19 percent to $4.1 trillion. In dollar terms, the U.S. added the equivalent of nearly three Germanys to its economy over that period.
Porsche makes some of its top-selling cars in Slovakia | Thomas Kienzle/AFP via Getty Images
The erosion of Germany’s industrial core will have a substantial impact on the rest of the European Union. Germany is not just Europe’s largest player; it also functions like the hub of a wheel, linking the region’s diverse economies as the largest trading partner and investor for many of them.
Over the past three decades, German industry has turned Central Europe into its factory floor. Porsche makes its top-selling Cayenne SUV in Slovakia, Audi has been churning out engines in Hungary since the early 1990s, and premium appliance-maker Miele makes washing machines in Poland.
Thousands of small- and medium-sized German firms, the so-called Mittelstand that forms the backbone of the country’s economy, are active in the region, producing mainly for the European market. While they won’t disappear overnight, a sustained decline in Germany would inevitably pull the rest of the region down with it.
Shortfalls
While EU officials have blamed the region’s looming deindustrialization on what they see as unfair policies in the U.S. and China that place European companies at a disadvantage, the problems in Germany run much deeper and are largely homemade. And they don’t have easy fixes.
Put simply, the formula that made Germany Europe’s industrial powerhouse — a highly skilled workforce and innovative companies powered by cheap energy — has come undone.
As a generation of baby boomers retires in the coming years, Germany is speeding toward a demographic cliff that will leave its companies without the engineers, scientists and other highly skilled workers they need to stay competitive in the global market. Within the next 15 years, about 30 percent of Germany’s workforce will reach retirement age.
Efforts to compensate for the growing worker shortfall through migration have so far failed. (Though Germany continues to take in hundreds of thousands of asylum seekers every year, most lack the skills companies need.)
Last week, German lawmakers passed a new immigration law that lifts many of the bureaucratic barriers foreign skilled workers have faced to settle in the country. Whether it will work is another question. Compared with the U.K., Canada or the U.S., Germany is often a tough sell, due to high taxes, the difficulty of learning the language and a culture that is often less than welcoming to foreigners.
A nearly 400-page study commissioned by the government that was published last month, for example, found that half of Germans harbored anti-Muslim views. Given that many of the highly educated workers the government would like to attract hail from Muslim countries such as Turkey, such animosity is hardly a selling point.
Compounding those demographic challenges are skyrocketing energy costs in the wake of Russia’s war on Ukraine, and Germany’s own efforts to combat climate change.
By halting deliveries of natural gas to Germany, the Kremlin effectively removed the linchpin of the country’s business model, which relied on easy access to cheap energy. Though wholesale gas prices have recently stabilized, they’re still roughly triple where they were before the crisis. That has left companies like BASF, whose main German operation alone consumed as much natural gas in 2021 as all of Switzerland, with no choice but to look for alternatives.
Death of Das Auto
Though the public at large appears blissfully unaware of the economic challenges that lie in store, those on the front lines have no illusions.
“The geopolitical developments have made it abundantly clear that our economic model is no longer a guarantor of prosperity,” said Andreas Rade, the managing director of the Association for the German Auto Industry, the sector’s main lobbying arm.
Neither is das Auto.
The car industry has buoyed Germany’s fortunes for more than a century and the country’s economic future rests in large measure on the ability of the sector — which accounts for nearly a quarter of its output — to maintain its hold on the luxury segment in a world of electric vehicles.
It’s not looking good. While the companies have recently booked record profits with the help of pent-up demand in the wake of the pandemic, that boost looks more like a last gasp than renewal.
That strategic blunder opened the door not just to Elon Musk, but for China, which began investing substantial sums in electric vehicle development 15 years ago as the Germans pooh-poohed the idea, to build a substantial lead. Last year, Chinese producers accounted for about 60 percent of the more than 10 million all-electric cars sold worldwide.
The Germans are already feeling the effects of their miscalculation.
Volkswagen, which has dominated the Chinese auto market for decades, lost its crown as the country’s largest automaker in the first quarter to BYD, a local competitor, amid a surge in EV sales. China is the world’s largest car market, accounting for nearly 40 percent of Volkswagen’s revenue.
A recent study by insurer Allianz projected that if current trends hold with Chinese manufacturers increasing their market share in both China and Europe, European carmakers and suppliers could see their profits fall by tens of billions of euros by 2030, with German companies bearing the brunt.
Though German carmakers have undergone a collective foxhole conversion on EV’s and are racing to catch up, they still lack the competitive advantage they enjoyed for more than a century with combustion engines. Indeed, the essential technology in an EV isn’t the motor, which is off-the-shelf technology, but the battery, which relies on chemistry, not the mechanical engineering prowess that defined Vorsprung durch Technik.
“We definitely have innovation difficulties with German industry and a competitiveness issue,” said Jens Hildebrandt, who leads the German Chamber of Commerce in China.
For the economic relationship between Germany and China, that represents a sea change. For decades, the Chinese viewed German industry and engineering as a model. All of a sudden, it’s the Germans who are looking to China.
“The big Chinese auto companies will soon have to build their own factories in Europe and maybe even in Germany,” Hildebrandt said, adding that it was a trend that “can’t be reversed.”
Downward spiral
Given the economic headwinds, it’s perhaps no surprise that many of Germany’s biggest companies are on a path toward being German in name only.
If that sounds far-fetched, consider the example of Linde, the industrial gases conglomerate. Until this year, the company, which started in the 1870s by developing refrigeration for breweries, was the most valuable blue-chip in Germany, with a market capitalization of about €150 billion. In January, it decided to exit the Frankfurt stock exchange in favor of its New York listing.
What Linde illustrates is that big German companies can survive and thrive with or without Germany. As conditions in the fatherland worsen, they will simply move elsewhere. For Germany, however, that would mean fewer high-paying jobs and lower tax revenue, not to mention the threat of sustained economic decline and political instability.
A recent surge in national polls by the far-right Alternative for Germany (AfD) underscores those stakes. Though the AfD’s rise has been driven by growing frustration over migration, a sustained economic funk would likely give the party a further boost.
Far-right party Alternative for Germany recently surged in national polls | Matthias Rietschel/Getty Images
A big flash point will be social welfare. Germany operates one of the most generous welfare states, with social spending accounting for 27 percent of the economy last year (compared with 23 percent in the U.S.). With Berlin under pressure to spend vastly more on defense, the belt-tightening — and the public backlash — has already begun. In an economic decline, it will only get worse.
A top priority for German industry — the modernization of Germany’s creaking infrastructure — will be more difficult to finance. Germany’s roads, bridges, shipping lanes and other critical infrastructure are in sore need of repair. Four out of five German companies said poor infrastructure hampered their business, according to a study published in November by the Institute for the German Economy (IW). The regulatory hurdles revitalization efforts need to overcome before breaking ground mean there’s no quick fix.
I’m fact, “the problems are likely to get worse,” the study’s authors concluded.
Exodus
German industry isn’t abandoning Deutschland altogether. They’re happy to stay — as long as the government pays them off.
BASF opened a plant near Dresden that makes cathode materials for electric-car batteries just two weeks ago and has pledged to keep investing in its home market. To secure such commitments, however, local and federal governments have been forced to offer generous incentives. BASF will receive €175 million in government support for its new battery operation, for example.
Similarly, in June, the U.S. chipmaker Intel secured an eye-watering €10 billion subsidy for a massive new factory in the eastern city of Magdeburg. That translates into €3.3 million for each of the 3,000 jobs the company has pledged to create.
Absent such support, the siren calls of more affordable markets is proving hard to resist. With German engineering having lost its edge in the electric era, the carmakers are doubling down on their overseas investments, especially in China or the U.S. — neither of them unfamiliar with using tax incentives and subsidies to rope in investors.
Funding offered by the U.S.’s Inflation Reduction Act has proved a particularly attractive lure. Volkswagen unveiled plans in March to build a $2 billion factory in South Carolina, where it wants to revive the Scout brand, a popular American 4×4 in the ’60s and ’70s.
In April, executives from the carmaker’s battery startup, PowerCo, stood alongside Canadian premier Justin Trudeau as they announced a €5 billion investment in a new battery factory in Ontario. The carmaker has pledged to invest billions more in North America in the next several years as it shifts to electric vehicles.
In Germany, by contrast, Volkswagen has abandoned plans to build a new factory for the “Trinity,” a new electric SUV, opting instead to retool existing facilities. The carmaker, which has a stable of brands that also includes Audi and Porsche, decided not to build a second battery plant in its home state of Lower Saxony due to the high cost of electricity. In April, however, the company announced it would invest roughly €1 billion in an electric vehicle center near Shanghai.
A recent survey of 128 German auto suppliers by the VDA, an industry group, found that not a single one planned to increase their investment in their home market. More than a quarter were planning to shift operations abroad.
Despite the country’s industrial exodus, Germany’s politicians are largely in denial about the looming political and economic challenges.
Industry lobbyists argue that the “interdependence” between China and Germany will be positive in the long run, but similar logic drove Berlin’s embrace of Russian natural gas — with disastrous consequences. And there’s no sign the German push into China is abating. Last year, German companies invested €11.5 billion in China, a record.
“What worries me is the asymmetry of the dependence,” Fratzscher said. “German companies have opened themselves up to blackmail because they are much more dependent on China than the other way around.”
For a taste of just how quickly national champions can get swept away by technology, they would do well to put in a call to Finland and enquire about Nokia, or Canada to ask about the fate of Research in Motion, the company behind the once-ubiquitous BlackBerry.
At some point, Germans will wake up to the dangers they face. The question is whether they will before it’s too late to do anything about it.
Either way, BASF will be ready. Asked recently what the company planned to do with the chemical plants it was shutting down at its German hub, Brudermüller, the CEO, tried to soften to blow, saying the company wouldn’t “demolish everything immediately.”
But he was more direct on another point: “We don’t need the space in Ludwigshafen at the moment.”
Gabriel Rinaldi and Peter Wilke contributed reporting.
CORRECTION: An earlier version of this article misnamed the Inflation Reduction Act.
