Switch to e-cars will cost Germany 75,000 jobs, study claims

Above, a charging station for electric cars in front of the headquarters German energy company Innogy. The pivot toward cleaner engines posed a “major challenge” to Germany’s biggest industry. (AFP)
Updated 05 June 2018

Switch to e-cars will cost Germany 75,000 jobs, study claims

FRANKFURT: The growing use of electrified vehicles is expected to cost Germany’s crucial car sector some 75,000 jobs by 2030, a study found Tuesday, with smaller auto parts suppliers set to be worst hit.
The IG Metall union, which commissioned the study along with BMW, Volkswagen, Daimler and a string of car parts makers, said the pivot toward cleaner engines posed a “major challenge” to Germany’s biggest industry, which employs more than 800,000 people.
Electric engines are simpler to build and require far fewer parts than petrol- or diesel-fueled cars.
According to the study, carried out by the Fraunhofer Institute, the shift will eliminate 100,000 of the 210,000 jobs in drivetrain manufacturing by 2030, while around 25,000 new roles will be created linked to batteries and other specific requirements for electric cars.
The figures were calculated on the assumption that by then, 25 percent of all cars on Germany’s roads will be fully electric, while another 15 percent will be hybrids, which combine an electric motor with a traditional internal combustion engine.
Today, these cars account for less than two percent of the market.
IG Metall chief Joerg Hofmann said the government and company bosses needed to take urgent action to prepare the industry for the upheaval, including through retraining schemes.
But he also warned that not everyone would survive the electric revolution.
“There will be suppliers who won’t be able to adapt their business model, especially among small- and medium-sized companies,” Hofmann told reporters in Frankfurt.
Whereas it takes some 4,000 workers to assemble a million gasoline-powered engines per year, just 1,840 are needed to build the same number of electric motors, the study said.
Volkswagen’s staff representative Bernd Osterloh told reporters that the car giant would respond to the changes by phasing out jobs through retirement schemes and “using the opportunities presented by the transformation.”
Despite being home to some of the world’s biggest and best-known carmakers, Germany’s auto industry was slow to focus its attention on the greener, smarter vehicles of the future — allowing newcomers like Tesla to take the lead.
But German firms have stepped up their efforts in the wake of Volkswagen’s 2015 “dieselgate” emissions cheating scandal, which badly damaged the reputation of diesel cars and spurred a push toward more environmentally friendly engines.


Oil up after drone attack on Saudi field, but OPEC report caps gains

Updated 42 min 55 sec ago

Oil up after drone attack on Saudi field, but OPEC report caps gains

LONDON: Crude oil prices rose on Monday following a weekend attack on a Saudi oil facility by Yemen’s Houthi militia and as traders looked for signs of progress in US-China trade negotiations.
Price gains were, however, capped to some degree by an unusually downbeat OPEC report that stoked concerns about growth in oil demand.
Brent crude, the international benchmark for oil prices, was up 85 cents, or about 1.4%, at $59.49 a barrel at 1225 GMT.
US West Texas Intermediate (WTI) crude futures were up $1.01, or 1.8%, at $55.88 a barrel.
A drone attack by the Iran-backed Houthi militia on an oilfield in eastern Saudi Arabia on Saturday caused a fire at a gas plant, adding to Middle East tensions, but state-run Saudi Aramco said oil production was not affected.
“The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions,” said Giovanni Staunovo, oil analyst for UBS.
Iran-related tensions appeared to ease after Gibraltar released an Iranian tanker it seized in July, though Tehran warned the United States against any new attempt to seize the tanker in open seas.
Concerns about a recession also limited crude price gains.
Meanwhile, China’s announcement of key interest rate reforms over the weekend has fueled expectations of an imminent reduction in corporate borrowing costs in the struggling economy, boosting share prices on Monday.
US energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.
“WTI in recent weeks has performed relatively better than Brent... Pipeline start ups in the United States have been supportive for WTI, while the ongoing trade war has had more of an impact on Brent,” said Warren Patterson, head of commodities strategy at Dutch bank ING.
The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.
It is rare for OPEC to give a bearish forward view on the market outlook.
“Such a bearish prognosis will heap more pressure on OPEC to take further measures to support the market,” said Stephen Brennock of oil broker PVM.