風蕭蕭_Frank
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歐洲經濟引擎正在熄火
https://www.politico.eu/article/rust-belt-on-the-rhine-the-deindustrialization-of-germany/?
萊茵河畔的鏽帶
德國的去工業化：如果歐洲的經濟引擎停滯，歐洲大陸本已兩極分化的政治格局將會顫抖。
作者：馬修·卡尼奇尼格 (MATTHEW KARNITSCHNIG)，2023 年 7 月 13 日於柏林
柏林——德國最大的公司正在離開祖國。150多年來，化工巨頭巴斯夫一直是德國商業的支柱，以源源不斷的創新支撐著德國工業的崛起，讓“德國製造”令世界羨慕不已。
但其最新的登月計劃——投資 100 億美元建造最先進的綜合設施，該公司聲稱這將成為可持續生產的黃金標準——並沒有在德國實施。 相反，它是在 9,000 公裏之外的中國建造的。
巴斯夫於 1865 年在萊茵河畔成立，當時名為 Badische Anilin- & Sodafabrik，在追逐亞洲未來的同時，它也在德國縮減規模。 2月份，該公司宣布關閉其家鄉路德維希港的一家化肥廠和其他設施，導致約2600人裁員。
巴斯夫首席執行官馬丁·薄睦樂 (Martin Brudermuller) 在 4 月份對股東表示：“我們越來越擔心我們的國內市場。”他指出，該公司去年在德國損失了 1.3 億歐元。 “盈利能力已不再接近應有的水平。”
這種萎靡不振現在遍及整個德國經濟，一係列調查顯示企業和消費者都對未來深感懷疑，德國經濟在第一季度陷入衰退。
這種擔憂是有根據的。 近20年前，德國通過一係列雄心勃勃的勞動力市場改革，擺脫了“歐洲病夫”的名聲，釋放了其工業潛力，迎來了持續的繁榮時期，尤其是在對其機械和汽車的強勁需求的推動下 來自中國。 盡管德國的出口量遠遠超過購買量，令許多合作夥伴感到沮喪，但其經濟卻蓬勃發展。
然而，繁榮時期是有代價的：經濟實力讓領導人陷入了錯誤的安全感。 他們未能推行進一步的改革現在又受到了影響。
突然之間，一場完美風暴正在這個前歐洲強國醞釀，這表明其當前的衰退不僅僅是政策製定者所祈禱的“技術性”衰退，而是經濟命運根本性逆轉的先兆，有可能給整個歐洲帶來震動，給整個歐洲帶來震動。 歐洲大陸本已兩極分化的政治格局更加劇變。
麵對高能源成本、工人短缺和大量繁文縟節的有毒混合物，許多德國最大的公司——從大眾和西門子這樣的巨頭到許多鮮為人知的小公司——正在經曆猛烈的覺醒，並爭先恐後地尋求更環保的解決方案。 北美和亞洲的牧場。
如果沒有出現意外的好轉，我們很難避免得出這樣的結論：德國經濟將走向更嚴重的衰退。
來自前線的報道隻會變得更糟。 6月份失業率同比增加約20萬人，這是企業通常增加就業崗位的月份。 盡管總體失業率仍處於 5.7% 的低位，職位空缺數量高達近 80 萬個，但德國官員正準備迎接更多壞消息。
德國勞工局局長安德裏亞·納勒斯表示：“我們開始感受到勞動力市場困難的經濟狀況。” “失業率正在上升，就業增長正在失去動力。”
長期以來一直是德國企業健康狀況風向標的德國工程公司的新訂單大幅下降，僅 5 月份就下降了 10%，這是連續第八次下降。 從建築業到化工行業，德國經濟也存在類似的疲軟現象。
外國對德國作為投資地的興趣也在減弱。 2022年德國新增外資數量連續第五年下降，創2013年以來最低點。
BVMW 首席經濟學家漢斯-尤爾根·沃爾茨 (Hans-Jürgen Völz) 表示：“有時人們會聽到‘緩慢的去工業化——嗯，它不再隻是緩慢地進行了。’該協會為德國中小型企業進行遊說，而中小型企業組成了德國中小型企業。 國家經濟的支柱。
當德國打噴嚏時……
要了解去工業化的長期影響，我們隻需看看美國的鐵鏽地帶或英國中部地區，它們曾經繁榮的工業走廊，後來成為政策失誤和全球競爭壓力的受害者，並且從未完全恢複。
隻有德國，其後果才會在整個大陸範圍內顯現。
該國對工業的依賴使其特別脆弱。 除了軟件製造商 SAP 之外，德國的科技行業基本上不存在。 在金融界，最大的參與者最出名的是做壞事
賭注（德意誌銀行）和醜聞（Wirecard）。 製造業約占其經濟的 27%，而美國這一比例為 18%。
一個相關的問題是，德國最重要的工業部門——從化學品到汽車再到機械——都植根於 19 世紀的技術。 雖然德國通過優化這些產品實現了數十年的繁榮，但其中許多產品要麽已經過時（內燃機），要麽在德國生產成本太高。
以金屬為例。 今年三月，擁有德國最大鋁冶煉廠 Uedesheimer Rheinwerk 的公司表示，由於能源成本高昂，將在年底前關閉該工廠。
如果德國有著悠久的經濟多元化曆史，那麽此類報告就不會那麽令人擔憂。 不幸的是，它在這方麵的記錄充其量是不完整的。
例如，德國率先開發了現代太陽能電池板技術，並在 2000 年代初成為世界上最大的生產國。 然而，在中國抄襲德國設計並用廉價替代品充斥市場後，德國太陽能電池板製造商崩潰了。
在生物技術領域，總部位於美因茨的 BioNtech 公司是 mRNA 疫苗開發的前沿公司，事實證明，該疫苗對於幫助世界戰勝 COVID-19 大流行至關重要。 但在這一成功的背後，該公司於一月份宣布了其創始人所說的在英國尖端癌症研究方麵進行“巨額”投資的計劃。
……歐洲感冒了
創新帶來經濟增長，而隨著德國傳統工業的衰落，問題是什麽大的新事物將取代它。 到目前為止，還看不到任何東西。
德國在聯合國世界知識產權組織編製的年度全球創新指數中僅排名第八。 在歐洲，它甚至沒有進入前三名。
許多觀察家認為人工智能技術將推動下一代經濟增長，但在人工智能領域，德國已經落敗。 2022 年，在人工智能領域被引用最多的 100 篇科學論文中，隻有 4 篇是德國論文。 相比之下，美國為 68，中國為 27。
德國 DIW 經濟研究所所長馬塞爾·弗拉茨舍爾 (Marcel Fratzscher) 表示：“德國在任何最重要的麵向未來的領域都沒有什麽可提供的。” “存在的是舊工業。”
比較德國和美國過去 15 年的發展軌跡，技術改變經濟或將其拋在後麵的力量顯而易見。 在此期間，美國經濟在矽穀繁榮的推動下增長了 76%，達到 25.5 萬億美元。 德國經濟增長 19%，達到 4.1 萬億美元。 以美元計算，美國同期經濟增長相當於近三個德國。
保時捷在斯洛伐克生產一些最暢銷的汽車 托馬斯·金茨勒/法新社，蓋蒂圖片社
德國工業核心的侵蝕將對歐盟其他國家產生重大影響。 德國不僅是歐洲最大的參與者，也是歐洲最大的參與者。 它還發揮著車輪輪轂的作用，將該地區的不同經濟體聯係起來，成為其中許多經濟體最大的貿易夥伴和投資者。
過去三十年來，德國工業已將中歐變成了自己的工廠車間。 保時捷在斯洛伐克生產最暢銷的卡宴 SUV，奧迪自 20 世紀 90 年代初以來一直在匈牙利生產發動機，高端電器製造商 Miele 在波蘭生產洗衣機。
數以千計的德國中小型企業（即構成該國經濟支柱的所謂中小型企業）活躍在該地區，主要為歐洲市場生產產品。 雖然它們不會在一夜之間消失，但德國的持續衰退將不可避免地拖累該地區其他國家。
汽車零部件製造商舍弗勒(Schaeffler)首席執行官克勞斯·羅森菲爾德(Klaus Rosenfeld)最近承認，“歐洲最終有可能成為這一轉變的輸家。”他補充說，他的公司可能會在美國建造下一家工廠。
不足之處
盡管歐盟官員將該地區迫在眉睫的去工業化歸咎於美國和中國的不公平政策，這些政策使歐洲公司處於不利地位，但德國的問題要嚴重得多，而且主要是內部造成的。 而且他們沒有簡單的解決辦法。
簡而言之，讓德國成為歐洲工業強國的模式——高技能勞動力和廉價能源驅動的創新公司——已經失效。
隨著嬰兒潮一代在未來幾年退休，德國正加速走向人口懸崖，這將使其公司失去在全球市場上保持競爭力所需的工程師、科學家和其他高技能工人。 未來 15 年內，約 30% 的德國勞動力將達到退休年齡。
人口老齡化並不是唯一的問題。 德國年輕人渴望安全的工作，而不是使該國成為世界領先經濟體之一的創業和發明的坎坷。
密斯。
DIW 的 Fratzscher 表示：“許多年輕人寧願為國家工作，也不願創業。”
通過移民來彌補日益嚴重的勞動力短缺的努力迄今為止都失敗了。 （盡管德國每年繼續接納數十萬尋求庇護者，但大多數人缺乏公司所需的技能。）
上周，德國立法者通過了一項新的移民法，消除了外國技術工人在該國定居所麵臨的許多官僚障礙。 是否有效是另一個問題。 與英國、加拿大或美國相比，由於高稅收、學習語言的困難以及通常不太歡迎外國人的文化，德國往往很難推銷。
例如，上個月發表的一項由政府委托進行的近 400 頁的研究發現，一半的德國人懷有反穆斯林觀點。 鑒於政府希望吸引來自土耳其等穆斯林國家的許多受過高等教育的工人，這種敵意很難成為賣點。
俄羅斯對烏克蘭的戰爭以及德國自身應對氣候變化的努力導致能源成本飆升，加劇了這些人口挑戰。
通過停止向德國供應天然氣，克裏姆林宮有效地消除了該國商業模式的關鍵，該模式依賴於輕鬆獲得廉價能源。 盡管天然氣批發價格最近已趨於穩定，但仍約為危機前的三倍。 這使得像巴斯夫這樣的公司別無選擇，隻能尋找替代品。僅巴斯夫在德國的主要業務在 2021 年消耗的天然氣就相當於整個瑞士的天然氣消耗量。
該國的綠色轉型，即所謂的能源轉型，隻會讓事情變得更糟。 就在失去俄羅斯天然氣供應的同時，該國關閉了所有核電。 即使在補貼可再生能源擴張近四分之一個世紀之後，德國仍然沒有足夠的風力渦輪機和太陽能電池板來滿足需求——這使得德國人支付的電費是國際平均水平的三倍。
達斯·奧托之死
盡管廣大公眾似乎幸福地沒有意識到即將麵臨的經濟挑戰，但前線的人們並不抱有任何幻想。
“地緣政治的發展已經非常清楚地表明，我們的經濟模式不再是繁榮的保證，”該行業主要遊說機構德國汽車工業協會常務董事安德烈亞斯·拉德(Andreas Rade)表示。
das Auto 也不是。
一個多世紀以來，汽車工業一直支撐著德國的命運，該國的經濟未來在很大程度上取決於該行業（占其總產值的近四分之一）在當今世界中維持其在豪華車領域的地位的能力。 電動汽車。
看起來不太好。 盡管這些公司最近在大流行後被壓抑的需求的幫助下實現了創紀錄的利潤，但這種提振看起來更像是最後一口氣，而不是複興。
汽車工業長期以來一直是德國民族自豪感的源泉，但它已成為德國的阿喀琉斯之踵，其原因更多地與傲慢有關，而不是該國的結構性缺陷。 多年來，梅賽德斯、寶馬和大眾等公司拒絕放棄內燃機，將特斯拉和其他早期創新者視為曇花一現。
這一戰略失誤不僅為埃隆·馬斯克（Elon Musk）打開了大門，也為中國打開了大門，中國在 15 年前就開始在電動汽車開發上投入大量資金，當時德國人對這個想法嗤之以鼻，以建立實質性領先地位。 去年，全球銷售的超過 1000 萬輛全電動汽車中，中國生產商約占 60%。
德國人已經感受到了他們誤判的影響。
由於電動汽車銷量激增，幾十年來一直主導中國汽車市場的大眾汽車在第一季度將中國最大汽車製造商的桂冠讓給了當地競爭對手比亞迪。 中國是全球最大的汽車市場，占大眾汽車收入的近40%。
保險公司安聯最近的一項研究預測，如果目前的趨勢持續下去，中國製造商在中國和歐洲的市場份額不斷增加，那麽到 2030 年，歐洲汽車製造商和供應商的利潤可能會減少數百億歐元，其中德國公司首當其衝。
盡管德國汽車製造商已經對電動汽車進行了集體散兵坑改造，並正在競相追趕，但他們仍然缺乏一個多世紀以來在內燃機方麵享有的競爭優勢。 事實上，電動汽車的關鍵技術不是電機（這是現成的技術），而是電池，它依賴於化學，而不是定義 Vorsprung durch Technik 的機械工程實力。
更重要的是，電動汽車正日益演變成滾動的科技娛樂膠囊，自動駕駛汽車指日可待。 如果有 o
德國在數字技術方麵還沒有表現出色。 這或許可以解釋為什麽特斯拉現在的市值是所有德國汽車製造商總和的三倍多。
中國德國商會會長延斯·希爾德布蘭特 (Jens Hildebrandt) 表示：“德國工業確實麵臨著創新困難和競爭力問題。”
對於德國和中國之間的經濟關係來說，這代表著巨大的變化。 幾十年來，中國人將德國工業和工程視為典範。 突然之間，德國人把目光投向了中國。
希爾德布蘭特表示：“中國大型汽車公司很快將不得不在歐洲甚至德國建立自己的工廠。”他補充說，這是一個“無法逆轉”的趨勢。
下降通道
考慮到經濟逆風，許多德國最大的公司正走上名義上的德國之路，這也許並不奇怪。
如果這聽起來有些牽強，請考慮一下工業氣體集團林德的例子。 直到今年，這家於 1870 年代開始為啤酒廠開發製冷設備的公司仍是德國最有價值的藍籌股，市值約為 1500 億歐元。 一月份，該公司決定退出法蘭克福證券交易所，轉而在紐約上市。
在此之前，該集團於 2018 年與一家美國競爭對手合並，之後決定放棄慕尼黑市中心總部，遷往都柏林。 在重組過程中，林德在本國裁減了數百個工作崗位。 盡管德國仍然是一個重要市場，約占收入的 11%，但它隻是眾多市場之一。
林德所說明的是，無論有沒有德國，德國大公司都可以生存和發展。 當祖國的情況惡化時，他們就會搬到其他地方。 然而，對德國來說，這將意味著高薪工作崗位減少和稅收收入減少，更不用說經濟持續衰退和政治不穩定的威脅。
極右翼德國另類選擇黨 (AfD) 最近在全國民調中的民意調查激增凸顯了這些風險。 盡管德國選擇黨的崛起是由於對移民問題日益不滿，但持續的經濟恐慌可能會給該黨帶來進一步的推動。
德國極右翼政黨另類選擇黨最近在全國民意調查中飆升 馬蒂亞斯·裏切爾/蓋蒂圖片社
一大亮點將是社會福利。 德國是福利最慷慨的國家之一，去年社會支出占經濟的 27%（而美國為 23%）。 由於柏林麵臨著大幅增加國防開支的壓力，緊縮開支——以及公眾的強烈反對——已經開始。 在經濟衰退的情況下，情況隻會變得更糟。
德國工業的首要任務——德國破舊的基礎設施的現代化——將更加難以融資。 德國的道路、橋梁、航道和其他關鍵基礎設施急需維修。 德國經濟研究所 (IW) 11 月發布的一項研究顯示，五分之四的德國公司表示基礎設施薄弱阻礙了他們的業務。 振興工作在破土動工之前需要克服監管障礙，這意味著沒有快速解決辦法。
事實上，“問題可能會變得更糟，”該研究的作者總結道。
出埃及記
德國工業並沒有完全放棄德國。 他們很樂意留下來——隻要政府付錢給他們。
巴斯夫兩周前在德累斯頓附近開設了一家工廠，生產電動汽車電池的陰極材料，並承諾繼續投資其國內市場。 然而，為了確保這些承諾，地方和聯邦政府被迫提供慷慨的激勵措施。 例如，巴斯夫將為其新電池業務獲得 1.75 億歐元的政府支持。
同樣，6 月份，美國芯片製造商英特爾獲得了令人垂涎的 100 億歐元補貼，用於在東部城市馬格德堡建造一座大型新工廠。 這相當於該公司承諾創造的 3,000 個就業崗位中每個崗位的投資額為 330 萬歐元。
如果沒有這樣的支持，更實惠的市場的誘惑就難以抗拒。 隨著德國工程技術在電動時代失去優勢，汽車製造商正在加倍加大海外投資，尤其是在中國或美國——它們都熟悉利用稅收優惠和補貼來吸引投資者。
事實證明，美國《通貨膨脹削減法案》提供的資金極具吸引力。 大眾汽車今年 3 月公布了在南卡羅來納州建造一座耗資 20 億美元的工廠的計劃，希望在那裏重振 Scout 品牌，這是 60 年代和 70 年代流行的美國 4×4 品牌。
4 月，汽車製造商電池初創公司 PowerCo 的高管與加拿大總理賈斯汀·特魯多 (Justin Trudeau) 一起宣布投資 50 億歐元在安大略省建造一家新電池工廠。 該汽車製造商承諾未來幾年將在北美增加數十億美元的投資
轉向電動汽車已經過去了整整一年。
相比之下，在德國，大眾汽車放棄了為新型電動SUV“Trinity”建造新工廠的計劃，而是選擇重組現有設施。 這家擁有奧迪和保時捷等穩定品牌的汽車製造商，由於電力成本高昂，決定不在其家鄉下薩克森州建造第二座電池廠。 然而，今年 4 月，該公司宣布將投資約 10 億歐元建設上海附近的電動汽車中心。
行業組織 VDA 最近對 128 家德國汽車供應商進行的一項調查發現，沒有一家公司計劃增加在本國市場的投資。 超過四分之一的人計劃將業務轉移到海外。
盡管該國出現了工業外流，但德國政界人士在很大程度上否認迫在眉睫的政治和經濟挑戰。
行業遊說者認為，從長遠來看，中國和德國之間的“相互依存”將是積極的，但類似的邏輯促使柏林擁抱俄羅斯天然氣，並帶來了災難性的後果。 沒有跡象表明德國對中國的推動正在減弱。 去年，德國企業在華投資達115億歐元，創曆史新高。
“令我擔心的是依賴性的不對稱性，”弗拉茨舍爾說。 “德國企業已經向敲詐勒索敞開了大門，因為它們對中國的依賴程度比對中國的依賴程度高得多。”
想要了解國家冠軍企業能夠以多快的速度被技術席卷，他們最好打電話到芬蘭詢問諾基亞，或者打電話到加拿大詢問 Research in Motion 的命運，這家曾經是移動科技背後的公司。 無處不在的黑莓手機。
總有一天，德國人會意識到他們所麵臨的危險。 問題是他們是否會在為時已晚之前采取行動。
無論哪種方式，巴斯夫都會做好準備。 最近，當被問及該公司計劃如何處理即將關閉的德國中心化工廠時，薄睦樂首席執行官試圖軟化態度，表示該公司不會“立即拆除所有工廠”。
但他在另一點上更為直接：“我們目前不需要路德維希港的空間。”
加布裏埃爾·裏納爾迪和彼得·威爾克貢獻了報道。
更正：本文的早期版本錯誤地命名了《減少通貨膨脹法案》。
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.
