Al Qahera, news TV in Cairo, asked me questions on Germany’s VW crisis. VW announced yesterday it will close at least two facilities and move to break the long-term agreement with its workers’ union for no layoffs till 2029. This is serious in that 1) VW, since its founding in 1937, has never shut any plants, and 2) it’s not just VW. and it’s not just the German auto sector.
I told Al Qahera that the same story can be told about Germany’s steel industry (i.e., Thyssen-Krupp), or its chemical industry (i.e., BASF).
German energy intensive industries are facing not merely the creeping uncompetitiveness long decried in the country, but outright deindustrialization.
I described to Al Qahera how this decline of German industry reminds me of USA deindustrialization (the “rust belt” collapse) during my years working in the USA auto industry in the mid-1970’s to early 1980’s (both at Chrysler and Ford, in Detroit) and USA Railways (I worked on the Michigan Central when it was consolidated with other railways, by the federal government, to form Conrail). I remarked how it took the USA some 15 or more years to restructure and again become a modern, digitalized manufacturer. There is no guarantee Germany could pull this restructuring off, and there was no guarantee the USA would either, but that was a special case of a mammoth economy,
The Global Barrel 