Germany’s Engine Shutdown: Why Deindustrialization is Intentional

The Volkswagen Crisis

Germany’s flagship company, Volkswagen, faces dire challenges today. As a symbol of postwar prosperity, VW now grapples with massive debt. Soaring labor and energy costs have put pressure on the company. The powerful IG Metall union drove wages to extreme levels, straining VW’s finances. Meanwhile, VW’s pursuit of electric vehicle (EV) development demands significant investments with modest returns.

Germany mandates VW’s pivot to EVs as it phases out combustion engines. However, VW’s electric cars lag behind international competitors like Tesla and BYD. Making electric vehicles differs fundamentally from manufacturing petrol-powered ones. Expecting VW to excel in both sectors proves naïve. Requiring an entire production shift within a decade resembles dismantling the industry.

Green Influence on Industrial Giants

Lower Saxony owns a significant 20% stake in VW. They recently placed Green politician Julia Willie Hamburg on the company’s supervisory board. Hamburg, who doesn’t own a car, has called for VW to transition from car manufacturing to “mobility services.” She pushes VW to distance itself from traditional automobile production. This shift exemplifies a growing trend: placing ideology above the core industries that drive the economy.

Robert Habeck, Germany’s Economics Minister, encapsulated this attitude years ago. In a 2011 interview, he asserted that fewer cars wouldn’t hurt economic growth. He predicted that “new industries” would emerge to replace the old ones. His stance dismisses the GDP-focused growth model. It challenges Germany’s established economic foundations.

Radical Ideologies Driving Policy

At the heart of Germany’s Green movement lie intellectuals like Ulrike Herrmann. She advocates for deindustrialization as a solution to climate concerns. Herrmann, a longtime Green Party member and TAZ editor, has written extensively on this subject. Her book, The End of Capitalism, argues that climate goals require fewer cars and a centrally planned economy.

Herrmann’s vision extends even further. She proposes rationing construction due to CO2 emissions from cement. She suggests limiting living space to 50 square meters per person. Meat would also face rationing because of its carbon footprint. Even high-speed trains, a staple of German transportation, would see restrictions. They would need to operate under 100 kilometers per hour. This vision presents a future where the state dictates lifestyles. Such plans arise from radical notions of resource conservation and environmentalism.

The Future of Germany’s Economy

Germany’s deindustrialization isn’t accidental; it stems from deliberate Green policies and long-standing ideological positions. The Green party now shifts these policies from debate to national law. Each new regulation edges Germany closer to abandoning its core industries. What remains in their place grows uncertain, but prosperity and innovation seem increasingly sidelined.