Zwickau, a metropolis in Germany’s east, is probably not as well-known as Detroit, however its economic system has revolved round inner combustion engines since August Horch established Audi right here at first of the 20th century.
So when Volkswagen introduced in 2018 that it might convert its Zwickau manufacturing unit, the biggest personal employer within the space, to fabricate nothing however electrical automobiles, it was a huge deal.
“Lots of people had been skeptical,” mentioned Michael Fuchs, who has labored on the manufacturing unit for greater than a quarter century. They puzzled, “What’s going to occur?” he mentioned.
Volkswagen shut down meeting traces churning out its standard Golf hatchbacks and transformed the manufacturing unit, which has its personal exit on the autobahn, to make six electrical fashions. The reworked plant can produce a automotive a minute, delivery them out by practice.
It was a uncommon case of a main automotive plant’s switching fully from inner combustion to battery energy, making Zwickau a case examine for a huge query confronting the auto trade.
Electric automobiles have far fewer components than gasoline automobiles — no radiators, exhaust pipes, gas tanks, fan belts or sophisticated gearboxes. As a end result, many autoworkers, executives and politicians have hypothesized that such automobiles would require fewer employees, resulting in mass unemployment in manufacturing unit cities and cities worldwide.
Zwickau, the place greater than 10,000 folks work for Volkswagen and tens of 1000’s extra for suppliers, seems to have averted these dire penalties. Employment hasn’t fallen off a cliff, and suppliers of combustion automobile components haven’t been pressured out of business en masse. Its expertise affords some hopeful classes for different locations that depend upon the auto trade.
But folks 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 trade in ways in which may nonetheless be very painful for established firms and their employees.
One huge change already seen in Germany and the remainder of Europe is the quick development of younger Chinese language electrical carmakers like BYD and SAIC, that are more and more luring clients away from established rivals like Volkswagen, the world’s second-largest automaker after Toyota.
“The query is: How a lot will mobility change total?” mentioned Thomas Knabel, who leads the Zwickau native of IG Metall, the union that represents Volkswagen employees. “Sooner or later, will Volkswagen nonetheless be current?”
One of the best-selling electrical automotive in Europe is Tesla’s Mannequin Y sport utility automobile, constructed at a manufacturing unit 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 keeping with Schmidt Automotive Analysis.
Disappointing gross sales have prompted Volkswagen to chop a shift on certainly one of its two meeting traces in Zwickau, the place the corporate makes the ID.4, the ID.5, two Audi fashions and two small electrical automobiles. 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 automobiles in the identical factories, permitting them to regulate to fluctuating gross sales.
“It’s a far more formidable mission than something I find out about in North America,” mentioned Ian Greer, a analysis professor at Cornell College who has studied the area round Zwickau. “VW has taken a a lot greater danger.”
With the manufacturing unit working beneath capability, some folks in Zwickau ponder whether Volkswagen’s electrical automobiles are interesting sufficient.
Max Jankowsky, president of the regional Chamber of Commerce, mentioned he was disenchanted that he hadn’t seen any Volkswagens throughout a current journey to Dubai. “It was simply Teslas, Teslas, Teslas,” mentioned Mr. Jankowsky, who can be the president of a firm 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, mentioned final month in a assertion.
Within the quick time period, not less than, the ache to the native economic system brought on by the Zwickau manufacturing unit’s conversion was surprisingly gentle, native officers, enterprise leaders and employee representatives say.
Elevated demand for employees to fabricate digital parts largely compensated for job losses from manufacturing traces that made components for combustion automobiles, in keeping with a examine by AMZ Saxony, a suppliers’ group.
“All in all,” mentioned Dirk Vogel, chief govt of AMZ, “not that a lot occurred.”
Volkswagen, native companies and officers coordinated an effort to organize employees and companies, blunting the affect.
The carmaker expanded its coaching institute in Zwickau to show workers about electrical automobile expertise. To generate enthusiasm, Volkswagen allowed employees to borrow battery-powered automobiles for a few days. The West Saxon College of Utilized Sciences in Zwickau, a state school that already had a robust give attention to the auto trade, expanded programs associated to electrical automobile expertise.
Suppliers developed new parts for electrical automobiles to switch merchandise at risk of turning into out of date. Eberspächer, a German provider that has a manufacturing unit 60 miles east of Zwickau, close to Dresden, started providing temperature-control programs for electrical automobiles along with emission programs for typical automobiles.
Just a few suppliers have suffered. GKN Driveline, which makes drive shafts not wanted in most electrical automobiles, is closing a manufacturing unit 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 trade and German labor prices. GKN didn’t reply to requests for remark.
New expertise has additionally created jobs, together with 175 at FDTech, based mostly within the close by metropolis, Chemnitz. The agency, partly owned by Volkswagen, is certainly one of 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 automobiles.
Due to a scarcity of electricians, engineers and different expert employees, the unemployment fee within the state of Saxony, which incorporates Zwickau, has elevated solely modestly. It was 6.6 p.c in March amid an total financial slowdown, up from 6.three p.c a yr earlier.
“There can be suppliers that disappear,” mentioned Karsten Schulze, the managing director of FDTech. “However the expert employees can be instantly wanted elsewhere.”
Volkswagen employees had some management as a result of German legislation requires them to be consulted on adjustments that have an effect on working circumstances. The IG Metall union extracted a promise from the corporate to not lay off any full-time workers in Zwickau till 2030 on the earliest. The assure doesn’t apply to momentary employees, nonetheless, and the corporate let 270 of them go after their contracts expired.
In the US, unions are comparatively robust within the Midwest and East, however most car factories within the South should not unionized. The United Vehicle Employees is attempting to vary that. However even when the union is profitable, U.S. firms may have no obligation to seek the advice of employees 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, can pay in addition to jobs in factories the place automobiles are assembled.
Residents observe with pleasure that Zwickau has survived many upheavals. After Germany’s defeat in World Struggle 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 unit to supply no-frills Trabant automobiles. The automobiles spewed blue exhaust and had a physique fabricated from plastic due to metal shortages. They may not compete with Western automobiles after the reunification of Germany in 1991. Hundreds of Trabant employees misplaced their jobs. By the top of the 1990s, unemployment within the area exceeded 20 p.c.
Volkswagen acquired the Zwickau manufacturing unit after reunification and steadily expanded it into one of many firm’s greatest manufacturing websites. The conversion to electrical automobiles 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 automobiles. The far-right Various for Deutschland occasion, 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 finances disaster. Gross sales of electrical automobiles in Germany slumped 14 p.c in the course of the first three months of the yr, although they nonetheless accounted for 12 p.c of recent automobiles.
Nonetheless, few folks in Zwickau are pushing for Volkswagen to return to constructing gasoline automobiles.
“With a transition to a new expertise, the query is at all times: Are you the primary or the final?” mentioned Constance Arndt, the lord mayor of Zwickau. “I believe it’s at all times higher to be first.”