When Dirk Kosbad started working at the Volkswagen plant in Zwickau in 1990, his job was to assemble the Trabant, East Germany’s signature car, by hand. Now, over 30 years later, he works in the same factory as a shift supervisor: watching over orange robots gliding swiftly around a silver car frame, shooting tiny bolts of lighting here and there, welding together the various parts that will soon enclose a large rectangular battery. Zwickau is the nucleus for Volkswagen’s shift to electric mobility.
After over a century of unrivalled power, the internal combustion engine has had its day. The list of countries planning bans on the sale of combustion-engine cars is growing: Norway’s phase-out is scheduled for 2025, followed by the UK in 2030, and the European Union’s 27 member states in 2035. Europe’s mighty automotive industry, and its 3.7 million manufacturing jobs, finds itself in the middle of a perfect storm. Digitisation, automation and the public’s awakening to the severity of the climate crisis herald nothing short of a revolution. Some people see this as an opportunity. Others, fearing the worst, have started talking of Europe’s car manufacturing heartlands turning into a constellation of mini Detroits.
In recent years car manufacturers have been forced to invest billions of euros in the development of greener machines. In Zwickau, the transition has already happened. Starting in 2019, Volkswagen retrained its 8,500 employees on site and remodelled the entire production line to exclusively build electric cars. “In the beginning we were pretty scared,” says Kosbad, 57. “No one could have imagined that it would be a success story. Everyone here was sceptical.” But Volkswagen’s gambit appears to have paid off: demand for electric vehicles has soared, with new car registrations in Germany almost doubling from 2018 to 2019 and more than tripling from 2019 to 2020. While the 365,000 electric cars registered are just a tiny sliver of Germany’s overall 48 million, the growth is exponential: the number of electric vehicle registrations in the first four months of 2021 was three times the entire 2020 amount. Volkswagen, which is Germany’s largest carmaker, is now only second behind Tesla in global electric vehicles sales. Now, initial scepticism among the employees in Zwickau has given way to cautious optimism, Kosbad says. Those who previously assembled exhaust systems are laying cables for the battery engines; some retrained as high voltage technicians. You need fewer workers to make an electric car, but Volkswagen solved this problem by increasing its output – hence selling more than ever and laying off no one, at least for now.
But not everyone has Volkswagen’s billions. The backbone of Europe’s car industry is made up by about 10,000 small and medium-sized part suppliers – 1,200 of them in Germany alone. These companies make components like fuel tanks, gearboxes or exhaust systems, and collectively employ 1.7 million people across the EU27, compared to the big car brands’ 1.2 million, according to data by CLEPA, a car supplier trade association. Their entire product portfolio is doomed to become obsolete in an electrified future, but most of them don’t have the funds to reinvent their business overnight – which means that thousands of jobs are at risk.
Cars are Germany’s most important export, with sales totalling around €300 billion annually. Almost five per cent of all domestic jobs are directly linked to the automotive industry. “We have just under a million employees in the car industry in Germany. We assume that around 200,000 of them are acutely endangered, most of them from automotive suppliers,” says Wolfgang Lemb, chairman of IG Metall, Germany’s largest trade union. A recent report by the Boston Consulting Group predicted that a staggering 42 per cent of jobs will be lost in “internal combustion engine-focussed suppliers” across Europe between now and 2030 – that, according the firm’s calculations, will result in 280,000 people out of work.