Zwickau, a metropolis in Germany’s east, is probably not as well-known as Detroit, however its financial system has revolved round inside combustion engines since August Horch established Audi right here originally of the twentieth century.
So when Volkswagen introduced in 2018 that it might convert its Zwickau manufacturing facility, the most important non-public employer within the space, to fabricate nothing however electrical automobiles, it was a giant deal.
“Lots of people have been skeptical,” stated Michael Fuchs, who has labored on the manufacturing facility for greater than 1 / 4 century. They puzzled, “What’s going to occur?” he stated.
Volkswagen shut down meeting traces churning out its standard Golf hatchbacks and transformed the manufacturing facility, which has its personal exit on the autobahn, to make six electrical fashions. The reworked plant can produce a automobile a minute, transport them out by practice.
It was a uncommon case of a significant automobile plant’s switching utterly from inside combustion to battery energy, making Zwickau a case examine for a giant query confronting the auto business.
Electrical automobiles have far fewer components than gasoline vehicles — no radiators, exhaust pipes, gasoline tanks, fan belts or difficult gearboxes. Because of this, many autoworkers, executives and politicians have hypothesized that such vehicles would require fewer staff, resulting in mass unemployment in manufacturing facility cities and cities worldwide.
Zwickau, the place greater than 10,000 individuals work for Volkswagen and tens of 1000’s extra for suppliers, seems to have prevented these dire penalties. Employment hasn’t fallen off a cliff, and suppliers of combustion car components haven’t been pressured into chapter 11 en masse. Its expertise provides some hopeful classes for different locations that rely on the auto business.
But individuals in Zwickau, with its immaculate however sleepy downtown, are nonetheless uneasy.
Whereas Zwickau’s expertise means that conversion to electrical automobiles is not going to itself result in financial distress, this and different new applied sciences are shaking up the business in ways in which might nonetheless be very painful for established firms and their staff.
One massive change already seen in Germany and the remainder of Europe is the quick progress of younger Chinese language electrical carmakers like BYD and SAIC, that are more and more luring prospects away from established rivals like Volkswagen, the world’s second-largest automaker after Toyota.
“The query is: How a lot will mobility change general?” stated Thomas Knabel, who leads the Zwickau native of IG Metall, the union that represents Volkswagen staff. “Sooner or later, will Volkswagen nonetheless be current?”
The most effective-selling electrical automobile in Europe is Tesla’s Mannequin Y sport utility car, constructed at a manufacturing facility round 145 miles north of Zwickau close to Berlin. Final yr, Volkswagen offered fewer than half as lots of its equal S.U.V., the ID.4, in line with Schmidt Automotive Analysis.
Disappointing gross sales have prompted Volkswagen to chop a shift on one among its two meeting traces in Zwickau, the place the corporate makes the ID.4, the ID.5, two Audi fashions and two small electrical vehicles. The choice illustrated the draw back of going all-in on electrical automobiles. Different established carmakers have hedged their bets, producing electrical automobiles and fuel-burning vehicles in the identical factories, permitting them to regulate to fluctuating gross sales.
“It’s a way more formidable undertaking than something I learn about in North America,” stated Ian Greer, a analysis professor at Cornell College who has studied the area round Zwickau. “VW has taken a a lot larger threat.”
With the manufacturing facility working under capability, some individuals in Zwickau ponder whether Volkswagen’s electrical automobiles are interesting sufficient.
Max Jankowsky, president of the regional Chamber of Commerce, stated he was upset that he hadn’t seen any Volkswagens throughout a current journey to Dubai. “It was simply Teslas, Teslas, Teslas,” stated Mr. Jankowsky, who can be the president of an organization that makes forged iron components for Volkswagen suppliers and different producers.
Volkswagen’s executives say they count on gross sales to choose up this yr because it begins promoting new fashions, together with a station wagon and a van, focusing on market segments that Tesla doesn’t play in.
“We’re conscious of our present challenges and are tackling them rigorously,” Oliver Blume, the Volkswagen chief govt, stated final month in an announcement.
Within the quick time period, not less than, the ache to the native financial system attributable to the Zwickau manufacturing facility’s conversion was surprisingly delicate, native officers, enterprise leaders and employee representatives say.
Elevated demand for staff to fabricate digital parts largely compensated for job losses from manufacturing traces that made components for combustion vehicles, in line with a examine by AMZ Saxony, a suppliers’ group.
“All in all,” stated Dirk Vogel, chief govt of AMZ, “not that a lot occurred.”
Volkswagen, native companies and officers coordinated an effort to arrange staff and companies, blunting the affect.
The carmaker expanded its coaching institute in Zwickau to show staff about electrical car expertise. To generate enthusiasm, Volkswagen allowed staff to borrow battery-powered vehicles for a couple of days. The West Saxon College of Utilized Sciences in Zwickau, a state faculty that already had a powerful give attention to the auto business, expanded programs associated to electrical car expertise.
Suppliers developed new parts for electrical automobiles to switch merchandise in peril of changing into out of date. Eberspächer, a German provider that has a manufacturing facility 60 miles east of Zwickau, close to Dresden, started providing temperature-control programs for electrical automobiles along with emission programs for typical vehicles.
Just a few suppliers have suffered. GKN Driveline, which makes drive shafts not wanted in most electrical vehicles, is closing a manufacturing facility in Zwickau and shifting manufacturing to Hungary. However GKN didn’t provide Volkswagen, and the closure seems to be a response to broader tendencies within the business and German labor prices. GKN didn’t reply to requests for remark.
New expertise has additionally created jobs, together with 175 at FDTech, primarily based within the close by metropolis, Chemnitz. The agency, partly owned by Volkswagen, is one among 5 firms within the space creating autonomous driving expertise.
Zwickau advantages from some distinctive luck. Many native suppliers make seats, dashboards, portray tools or different merchandise that electrical automobiles want simply as a lot as gasoline vehicles.
Due to a scarcity of electricians, engineers and different expert staff, the unemployment fee within the state of Saxony, which incorporates Zwickau, has elevated solely modestly. It was 6.6 % in March amid an general financial slowdown, up from 6.3 % a yr earlier.
“There can be suppliers that disappear,” stated Karsten Schulze, the managing director of FDTech. “However the expert staff can be instantly wanted elsewhere.”
Volkswagen staff had some management as a result of German regulation requires them to be consulted on adjustments that have an effect on working situations. The IG Metall union extracted a promise from the corporate to not lay off any full-time staff in Zwickau till 2030 on the earliest. The assure doesn’t apply to non permanent staff, nevertheless, and the corporate let 270 of them go after their contracts expired.
In america, unions are comparatively robust within the Midwest and East, however most car factories within the South usually are not unionized. The United Car Employees is making an attempt to vary that. However even when the union is profitable, U.S. firms may have no obligation to seek the advice of staff about adjustments that may have an effect on their jobs, or to retrain them for brand new jobs. And there’s no assure that new jobs making batteries, for instance, pays in addition to jobs in factories the place vehicles are assembled.
Residents word with satisfaction that Zwickau has survived many upheavals. After Germany’s defeat in World Warfare II, Soviet occupiers confiscated Audi’s manufacturing tools. The carmaker moved to Bavaria and was later acquired by Volkswagen.
The Communist authorities that dominated East Germany transformed the Zwickau manufacturing facility to provide no-frills Trabant automobiles. The vehicles spewed blue exhaust and had a physique manufactured from plastic due to metal shortages. They might not compete with Western vehicles after the reunification of Germany in 1991. 1000’s of Trabant staff misplaced their jobs. By the tip of the Nineties, unemployment within the area exceeded 20 %.
Volkswagen acquired the Zwickau manufacturing facility after reunification and step by step expanded it into one of many firm’s largest manufacturing websites. The conversion to electrical vehicles was momentous sufficient that Angela Merkel, the German chancellor on the time, attended a dedication ceremony in 2019, when the primary battery-powered mannequin rolled off the meeting line.
Not everybody in Zwickau is a fan of electrical vehicles. The far-right Various for Deutschland get together, which has 11 of 48 seats within the Zwickau Metropolis Council, has complained that Germans are being pressured to purchase electrical automobiles, echoing feedback from former President Donald J. Trump and different Republicans.
The nationwide authorities, led by Chancellor Olaf Scholz, a Social Democrat, angered many in Zwickau when it abruptly slashed subsidies for electrical automobiles final yr to take care of a funds disaster. Gross sales of electrical automobiles in Germany slumped 14 % through the first three months of the yr, although they nonetheless accounted for 12 % of latest vehicles.
Nonetheless, few individuals in Zwickau are pushing for Volkswagen to return to constructing gasoline vehicles.
“With a transition to a brand new expertise, the query is all the time: Are you the primary or the final?” stated Constance Arndt, the lord mayor of Zwickau. “I feel it’s all the time higher to be first.”
