Proping up car industry
Discussion
Almost impossible to really calculate as it has been done so many different ways over the years. You've got scrappage schemes, underwritten loans, employment incentives, tariffs, embargoes, legislation just for starters.
Probably easiest to rank European nations by manufacturing volume and simple assume the higher the volume the higher the overall subsidies?
Probably easiest to rank European nations by manufacturing volume and simple assume the higher the volume the higher the overall subsidies?
DonkeyApple said:
Almost impossible to really calculate as it has been done so many different ways over the years. You've got scrappage schemes, underwritten loans, employment incentives, tariffs, embargoes, legislation just for starters.
Probably easiest to rank European nations by manufacturing volume and simple assume the higher the volume the higher the overall subsidies?
Probably not made myself to clear.Probably easiest to rank European nations by manufacturing volume and simple assume the higher the volume the higher the overall subsidies?
I was thinking of direct subsidies, like given to BL/Rover over the years. Had an argument with a friend that the Italians and French probably spent the same or even more propping up their car industry, he thinks not.
Now I am curious who is right.
Also argued the Germans subsidise heir steel industry but he maintained it is not possible as it is against EU rules
DodgyGeezer said:
Oliver Hardy said:
Also argued the Germans subsidise heir steel industry but he maintained it is not possible as it is against EU rules
He's sort of right. It is against EU regulations however...It's like the anti bribery laws, it just means the funds are funnelled more subtly.
OP, you will be correct if you're talking about soft subsidies and back door payments to support the automotive industry. Not sure why you single out France and Italy as Germany is by far the largest recipient of funds by a mile. You'll probably find more overt payments in recent years in the U.K. just because of the direct payments for things like Rover but we pay constant subsidies to Honda, Nissan, BMW to keep assembling a few cars here. And everyone can get direct free cash by getting Barry to walk to the back of the factory and start playing around with an old vacuum, while Sheryl mocks up a nice 'EV Development' poster for the wall.
In short, Germany has by far the largest automotive lobby group, the largest car industry and its the largest percentage of their manufacturing output. They will be receiving the largest taxpayer donations via all the collective mechanisms. The U.K. will be the smallest of the 4 merely as a function of having jettisoned the bulk of its car manufacturing industry.
The flipside being that we are far less exposed to the economic cliff edge which will come in the 2030s as Europeans are blocked from buying new ICE, not exposed to the looming arrival of more competitive Chinese brands/products and we can meet 2050 net zero whereas the EU doesn't stand a chance and will be crippling its global manufacturing competitiveness due to carbon credit costs.
DonkeyApple said:
The flipside being that we are far less exposed to the economic cliff edge which will come in the 2030s as Europeans are blocked from buying new ICE, not exposed to the looming arrival of more competitive Chinese brands/products and we can meet 2050 net zero whereas the EU doesn't stand a chance and will be crippling its global manufacturing competitiveness due to carbon credit costs.
Germany and German manufactuers seem oblivious to the effect EVs are going to have on them at the moment. One of the main reasons Diss was ousted from VW was his frank conversations around the future not requiring as many workers which the works council would not accept. Their staff are too expensive and there's too many of them for the future of EV manufacturing. Ultimately when they get undercut by cheap Chinese imports union power won't hold back the tide.AlphaDelta said:
Germany and German manufactuers seem oblivious to the effect EVs are going to have on them at the moment. One of the main reasons Diss was ousted from VW was his frank conversations around the future not requiring as many workers which the works council would not accept. Their staff are too expensive and there's too many of them for the future of EV manufacturing. Ultimately when they get undercut by cheap Chinese imports union power won't hold back the tide.
Could not agree more and the Germans are held to ransom at every turn by ultra powerful Works Councils. The business I work for has a German arm to it and the Works Council objected to a global rollout of Outlook (from Lotus Notes) as they felt it was going to put peoples jobs at risk (no idea how they came up with that) and it delayed the rollout by over 12 months - employers are strangled by their powerAlphaDelta said:
Germany and German manufactuers seem oblivious to the effect EVs are going to have on them at the moment. One of the main reasons Diss was ousted from VW was his frank conversations around the future not requiring as many workers which the works council would not accept. Their staff are too expensive and there's too many of them for the future of EV manufacturing. Ultimately when they get undercut by cheap Chinese imports union power won't hold back the tide.
It's an attack on multiple fronts for the German car industry. They are reliant on the vassal states of the EU to keep borrowing from German banks to keep buying German goods. That's now under heavy pressure as the cost of borrowing rises and spending falls. Very little of the EU is electrifying and is years behind so when 2030 arrives there will be a sudden fall in demand for German cars. They've got to pay huge sums to reach net zero by 2050 that will cause massive goods inflation. They are decades away from energy self sufficiency and remain reliant on non friendly nations for energy. They have a hugely aging population and have filled in the youth worker market with imported labour that will go home if there is no overt economic advantage to living abroad. They are massively in bed with China who now have a serious level of control over the bottom end of the German car market and that control will leap forward in 2030. They don't have the same access as before to the London credit markets. The U.K. consumer is vital for the car manufacturers but post Brexit they have a less captive market and the U.K. market will be the first to open up to Chinese brands. The EU's power to keep Chinese cars out of the EU is waning and incoming price competition may well be the tipping point there.
In short, there are truly terrible headwinds facing the German economy and the German auto industry. Conversely, in the U.K. we are now pretty agnostic as to where our cars come from. We don't really build any here by comparison so are free to import from whichever market serves us best and I think this economic slow down will be the event that opens the door to the massive and hugely superior (pricing) Chinese market. Plus we have a later date for EV only and a much smaller area of less developed zones where adoption will be problematic.
While everyone was blathering about how Tesla was some kind of threat to the German car industry it has always been China that is the threat and inevitable dominator. It can put manufacture, out compete anything Europe can do just like America did in the 40s and can still do today but China has made no secret that it's entire domestic EV market was merely step one in dominating global car exports and manufacturing. And luckily for us in the U.K. we are standing in front of that unstoppable juggernaut but happily cruising in its wake.
AlphaDelta said:
DonkeyApple said:
The flipside being that we are far less exposed to the economic cliff edge which will come in the 2030s as Europeans are blocked from buying new ICE, not exposed to the looming arrival of more competitive Chinese brands/products and we can meet 2050 net zero whereas the EU doesn't stand a chance and will be crippling its global manufacturing competitiveness due to carbon credit costs.
Germany and German manufactuers seem oblivious to the effect EVs are going to have on them at the moment. One of the main reasons Diss was ousted from VW was his frank conversations around the future not requiring as many workers which the works council would not accept. Their staff are too expensive and there's too many of them for the future of EV manufacturing. Ultimately when they get undercut by cheap Chinese imports union power won't hold back the tide.One thing Brexit has done is to ensure content of EVs is localised because of the rules of origin requirement. ie cars passing either way between UK and EU have to have a certain percentage of local sourced parts (either UK or EU) to qualify for zero tariffs. Whether we have any industry to protect in the next few years is a moot point.
Andy665 said:
AlphaDelta said:
Germany and German manufactuers seem oblivious to the effect EVs are going to have on them at the moment. One of the main reasons Diss was ousted from VW was his frank conversations around the future not requiring as many workers which the works council would not accept. Their staff are too expensive and there's too many of them for the future of EV manufacturing. Ultimately when they get undercut by cheap Chinese imports union power won't hold back the tide.
Could not agree more and the Germans are held to ransom at every turn by ultra powerful Works Councils. The business I work for has a German arm to it and the Works Council objected to a global rollout of Outlook (from Lotus Notes) as they felt it was going to put peoples jobs at risk (no idea how they came up with that) and it delayed the rollout by over 12 months - employers are strangled by their powerGermany, in reality, hasn't yet transitioned to a 21st century economy which is why it is now so heavily exposed to 20th century industrial manufacturing and has a deficit of financial services and the service industry in general. They remain trapped by their industrial heritage and might of 100 years ago.
Their archaic infrastructure is boldly highlighted by the comedic prevalence of the fax machine in business and absence of fibre broadband and other essential 21st century infrastructure.
DonkeyApple said:
The Union movement that has been cited for decades as some kind of post industrial nirvana will simply be revealed for it is, a legacy from never having actually left the industrial era.
Germany, in reality, hasn't yet transitioned to a 21st century economy which is why it is now so heavily exposed to 20th century industrial manufacturing and has a deficit of financial services and the service industry in general. They remain trapped by their industrial heritage and might of 100 years ago.
Their archaic infrastructure is boldly highlighted by the comedic prevalence of the fax machine in business and absence of fibre broadband and other essential 21st century infrastructure.
in other words 1970s UK?Germany, in reality, hasn't yet transitioned to a 21st century economy which is why it is now so heavily exposed to 20th century industrial manufacturing and has a deficit of financial services and the service industry in general. They remain trapped by their industrial heritage and might of 100 years ago.
Their archaic infrastructure is boldly highlighted by the comedic prevalence of the fax machine in business and absence of fibre broadband and other essential 21st century infrastructure.
As an aside it is amazing how little credit-card use there is in Germany (whether that is good or bad is open to debate!)
DodgyGeezer said:
in other words 1970s UK?
As an aside it is amazing how little credit-card use there is in Germany (whether that is good or bad is open to debate!)
Lower consumer debt within Germany is good but this is dwarfed by the fact that the entire German economy post 1999 is built upon lending non German EU states and consumers money with which to buy German goods and services. It only needs a small drop in that activity for Germany to have problems. As an aside it is amazing how little credit-card use there is in Germany (whether that is good or bad is open to debate!)
The EU has had a 20 year long expansionist policy pushing as hard and as fast as possible to the East to procure more borrowers and shoppers and have now hit a hard wall called Russia which has ended that expansion and so the growth that has driven and underpinned the German economy is now ex. They can no longer add millions of new customers and the existing customers face rising costs so falling purchasing power.
It's really quite interesting that if you look at the EU map in 2000, 2010 and 2020 you can visually see the massive and rapid expansion Eastwards in search of more and more captive customers that have been getting poorer and poorer and higher and higher in default risk to feed into the grinder.
The default risk of the PIGS hasn't gone away and more and higher risk nations have been added to the pot.
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