Germany’s onslaught on its famed automotive and production industries appears to be taking an economic toll as the country pushes ahead to go green by phasing out internal combustion engines and coal power plants.
Recently we reported how electricity prices are again slated to increase this year, and thus will continue to make German power among the most expensive worldwide.
A wave of green activism has led to tighter regulations against the internal combustion engines and to a planned phase-out of coal-fired power plants.
Teetering on recession
Just recently German online business daily Handelsblatt reported here that there are “new concerns about an economic slump in Germany” as “surprisingly weak figures are fueling new worries about a downturn”.
“Horrible numbers”…a “disaster”
“Experts spoke of ‘horrible numbers’, a ‘disaster’. Industry, construction, and energy providers produced a full 3.5 percent less in December than in the previous month,” the Handelsblatt reports.
December production plummets 6.8%
The economic bloodbath was even worse in the production sector which “fell even more sharply, with output falling by 6.8 percent – the sharpest drop since the end of 2009,” writes the Handelsblatt. “Concerns are growing again that the German economy may be in more difficult waters than expected.”
For Germany, “2019 was not only the worst year for industrial orders since 2008, it was also the first time since 2002 that German order books shrank for two years in a row,” reports Yahoo here.
Massive automotive layoffs
The German auto sector has been hard hit. For example, car maker Opel recently announced 2,100 job cuts in Germany. Late last year Daimler, owner of Mercedes Benz, announced plans “to ax at least 10,000 jobs,” Volkswagen’s Audi said “it would slash up to 9,500 jobs or one in ten staff by 2025 and car suppliers Continental and Osram announced staff and cost cuts.”
The Financial Times reported today that Daimler suffered its “worst results in decade” and that its earnings “plunged 60% in 2019 amid ‘Dieselgate’ woes.” Daimler also “refused to deny reports” that an additional 5,000 jobs could be cut.
The Financial Times adds: “Daimler is being forced to spend heavily on electric vehicles and plug-in hybrids in order to avoid fines from Brussels for breaching new emissions regulations.”
Other reasons cited for the poor German economic results are the ongoing global trade disputes. Figures are expected to come under even greater pressure due to the spreading corona virus in China.