Climate emergency, industrial emergency, social emergency: how to arrange the three-way race? (2019/09/15)

The state of emergency in which the automotive industry finds itself at the end of 2019 gives rise, in Frankfurt and elsewhere, to a complex interplay of influence in which everyone backs their words to a cause that is a priori legitimate to counter another stakeholder who invokes another one.

 

A year ago, the EU based its injunctions on the climate emergency. Car manufacturers and governments alike are sensitive to the financial imperative and would like SUV sales to be able to continue to generate cash to cover losses on EVs for the former, and to finance inventives for the latter     .
Trade unions, SMEs and regions that rely on automobile clusters to keep jobs are seeing factories weakened and the number of jobs destroyed in the automotive sector. They fear that those created by electrification will not be of much concern to them.

 

At the heart of these debates, in the EU, Germany and France, the quantification of the damage on employment is becoming a key issue for very good reasons.
The divergences observed at this level are not only a matter of the rigour of the methods or the strength of the assumptions. Above all, they reveal very significant differences in what should be the appropriate scope for assessing the consequences of forced-run electrification that will have to be managed.
To capture these differences, one can compare the study proposed at the end of 2018 by the AIE ("the European Association of Electrical Contractors") with the previous study by the Fraunhofer research institute commissioned by IG Metall on the impact of electrification on employment in Germany, published in June of the same year.
The first one answered the second one.

 

The Fraunhofer research institute estimated job losses in the German automotive sector between 2017 and 2030 at 75,000, 27% of which were due to electrification, the others resulting from increased productivity. 
The AIE was no longer focusing on just Germany but on the EU at large and no longer on the automotive industry but on the entire electricity value chain.
It thus concluded that the job losses in the automotive sector specifically due to electrification (86,000) would be much more than offset by 200,000 jobs created by 2030 to enable EVs to operate. Of these 200,000 jobs, 57% would correspond to the association's scope, i.e. the installation, operation and maintenance of charging points.
Greg Archer, T&E's own mobility manager, commented on the study at the time as follows:
"Politicians should integrate this study well, not only for what it says about the benefits of EVs, but also for not placing too much trust in traditional industries when their representatives claim that environmental issues cannot be addressed without putting many people out of work. It's most of the time an excuse to do nothing. (…)."
Recalling its recurring calls to the EU to create the conditions that would allow Europe to benefit from the EV revolution and avoid it benefiting mainly other regions of the world, T&E welcomed LG's announcement related to the growing demand for VW batteries: the Korean chemicals firm would triple its battery production capacity in Poland! CQFD: Europe is benefiting from the EV revolution.

 

Very clearly, as Georges Marchais (leader of the French Communist Party in the 1970s-80s, famous for his appraisal of the soviet experiment...) would have said in the past, the "globally positive" assessment can only be found by changing the scope.
The problem is that both industrial and social issues cannot be formulated and tackled across the entire value chain and across the EU. They are relevant at the level of each region, each firm, and even each site and each profession.
For a French or German employee of a subcontracting SME, knowing that jobs are being created in another sector hundreds of kilometres away is irrelevant and it is the Fraunhofer's study and not the IEA's study that is relevant. Even if there is an obvious instrumentalization of the issue of employment by the big car owners, the question is relevant and - like the question of recharging points raised last week - it deserves to be asked very quickly: now that the climate emergency has been recognized and this has given rise to the decisions that we know, emergencies must become social and industrial.

 

In France in particular, unlike in Germany, the decline in automotive employment over the past 15 years has been much greater than that which will be linked to electrification in the coming years. It was mainly related to the relocation of the assembly of vehicles in segments A and B.
If the French new deal on electricity could be made by allowing most of the relevant products of the two major manufacturers to be manufactured in France with cells, batteries (or FCEs) and turbines designed and built in France, as is the case for the moment, then it would be more acceptable.
If nothing is done about it, there is a risk that the two automakers will consider that the very low margins achieved on EVs impose, as in the case of a Clio, C3 or 208, a Moroccan, Turkish or Eastern European assembly: while it could slow or reverse the trend we have been on for years, the electrification movement would strengthen it and the social damage would be maximum.

 

During the controversy that opposed her to Carlos Tavares in March, Karima Delli ended the interview she had given to La Tribune by saying: 
"Do we want a less competitive European industry? This is the message I will bring to the next European term of office. We will organise a summit on the conversion of the European automotive industry."

 

Here we are, we must very quickly put the horse before the cart of the climate emergency that has been launched.

 

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Translatedwithwww.DeepL.com/Translator, corrections by Géry Deffontaines