Cars in Europe, endless crisis: declining sales, factories at risk and thousands of jobs threatened with a ban on combustion engines in 2035
Europe is carrying out an industrial revolution in reverse. After having been the cradle of the automobile between the 19th and 20th centuries, with the development of dozens of brands and factories for millions of workers, today it risks being the tomb of motor vehicles. Or at least those produced on the continent.
The dramatic news arriving from Germany came a few days ago. The country that has long driven the sector, with brands such as Volkswagen, BMW, Mercedes and Audi, has seen sales, and therefore production, reduced by 2.6 million vehicles in the space of five years. Almost a million in Europe alone, more than a million and a half in China. Just to clarify, it is a figure that is equal to the number of cars made in Italy by Stellantis multiplied by 6.5, i.e. as if a dozen factories had stopped producing cars, because no one buys them. In fact, in Germany itself, a profound transformation is announced, but perhaps it would be better to say a radical reduction in the automotive industry. Volkswagen plans to cut 100,000 jobs. The CEO of Mercedes, equivalent to our CEO, has postponed the payment of the extraordinary bonus to 90 thousand employees until next year, adding that – from now on – working hours will return from 35 to 40 hours per week, but with the same salary. And, just to complete the picture, the head of Bosch, the main manufacturer of propulsion systems, but also of brakes, steering, batteries and software supplies, resigned after planning to eliminate 22 thousand jobs.
And if Germany is forced to deal with a sharp decline in the market and competition from electric or hybrid cars built in China or Korea, the rest of Europe is not doing any better. Estimates predict a reduction of 250,000 jobs in the coming years but these are probably optimistic projections because, from 2019 to today, European cars have lost almost a fifth of their sales and the decline will only be reflected in employment. A shocking study by Boston Consulting Group claims that – already today – continental production capacity is oversized by around 5.6 million vehicles. It means that of the 90 factories still active, 35 will have to close.
Just to be clear, the automotive sector represents the backbone of the industry in Europe. In the factories located here, between direct and related production, just under 14 million people work, for a total turnover equal to 8 percent of GDP. No other sector, from food to chemistry, from pharmaceuticals to metallurgy, can compete. And, if we exclude construction, the automotive sector, with 6.1 percent, is also first in terms of number of employees. Yet, despite being crucial to the continent’s economy, Brussels is doing everything it can to kill the automotive industry.
As you can see, the numbers are already catastrophic, but the signs are even worse. However, despite this, the Union is heading towards the abyss whistling, without doing anything to stop the clock which, in 2035, will outlaw combustion engines. It’s not just the ban on producing vehicles powered by fossil fuels: the death of an economy that made the history of the industrial revolution is the thousand rules wanted by Europe, compliance with which entails additional burdens for producers.
What will happen when hundreds of thousands of workers become unemployed? What will happen when a series of companies are forced to close because Brussels has decreed their death? I have the feeling that no one in Europe has come to terms with the consequences of the green transition. There is talk of converting assembly lines into factories for tanks but – as Tobia De Stefano explained in the previous issue of Panorama – the operation is not that simple. And, while calculations are circulating on how minimal the reduction in greenhouse gas emissions will be following the introduction of electric motors, no one dares to make predictions about job cuts.
In this way, the industrial revolution on the contrary proceeds undaunted and what has been built in over a century risks being destroyed in little more than a decade.
