Ifo study on the switch to e-mobility: Up to 221,000 jobs in the car industry on the brink

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The internal combustion engine is being phased out: "There will be a lot more cracking in the framework," warns IG Metall

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Hendrik Schmidt / dpa central image

First came the end for coal and steel in the Ruhr area, now the manufacturers of cylinder heads and gasoline pumps in Bavaria or Baden-Württemberg could face the same threat.

The car companies are still trying to make the switch to electric drives as smoothly as possible, but a new study by the Munich-based Ifo Institute has considerable doubts about this, at least as far as the workforce is concerned.

Around 613,000 jobs in Germany still depend on the construction of gasoline and diesel cars.

With the ramp-up of electromobility in 2025, "between 29 percent and 36 percent of the affected employees will be available," according to the study on behalf of the German Association of the Automotive Industry (VDA).

Up to 221,000 employees could be eliminated in less than five years.

Even if around 86,000 of them could retire by then, there is still a large gap.

Medium-sized suppliers in particular are threatened

With retraining and advanced training already today, companies should cushion the decline, said study leader Professor Oliver Falck.

Corporations could also bring outsourced production processes back into the company.

But that would also be at the expense of suppliers who develop and manufacture parts for e-cars.

Small businesses that specialize in a few products are often unable to replace parts that are no longer in demand with other products.

"The transition to electromobility is a major challenge, especially for the medium-sized supplier industry," Ifo President Clemens Fuest commented on the study.

In 2019, the production value of all products directly dependent on the combustion engine was 149 billion euros.

But e-cars no longer need cylinder heads, pistons, fuel pumps, spark plugs and mufflers.

Research, development and the creation of new capacities for e-cars and digitization have so far supported employment in the automotive industry.

But now the automakers and suppliers have started to cut jobs.

A central question for the Ifo researchers in the coming years is whether the dismantling of parallel structures for combustion and electric cars and lower added value will cost more jobs.

"There will be a lot more cracks in the framework as far as the employment side is concerned," warned IG Metall boss Jörg Hofmann.

Because the more stringent targets for reducing CO2 emissions meant for Germany that two out of three new cars would have to be electric or hybrid cars by 2030.

"And every more electric car is one less combustion engine," said Hofmann.

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Logo of the supplier company known as "Kolben-Mahle": In the 100th year of the company in 2020, the loss amounted to 434 million euros

Photo: Marijan Murat / dpa

"Without investments and industrialization (alternative drives) in Germany, we run into an employment fiasco," Hofmann said in an interview with the Reuters news agency.

Anyone who spreads the thesis that the loss of jobs can be completely compensated for is sowing false hopes.

Even with investments in battery technology, it remains a huge challenge.

IG Metall sees Saarland, Thuringia and South Westphalia particularly affected

According to IG Metall boss Hofmann, the structural change in the automotive industry is affecting certain regions more than others.

In parts of Saarland, Thuringia and South Westphalia, the question of the prospects for employees arises most sharply.

In 2020, a future automobile fund was decided, which will be filled with 200 million euros by the state.

"We are trying to get regional transformation networks off the ground in pilot regions as soon as possible with financial help from the Automobile Future Fund in order to compensate for the impending loss of industrial jobs," said Hofmann.

All actors should now set off together and not only when the site is about to be closed with layoffs.

IG Metall is strictly against a combustion ban in 2030, as the Greens, which are currently strong in surveys, are calling for.

"A combustion ban in 2030 is not a sensible requirement," said Hofmann.

“I don't see that the charging infrastructure in Germany and Europe is developing so dynamically that such a goal can be achieved by 2030.” Because at the moment the biggest problem is not the production side or the state-subsidized sales of e-cars.

"But we see with our eyes an extreme shortage of charging infrastructure."

apr / dpa / Reuters