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back to index backEUROtalk September,  2005

COMMENT: Germany needs more than politics as usual

The timing of the Bundestag election, which takes place on Sept. 18, the first Sunday after the opening of the Frankfurt motor show, is making sure that politics and innumerable campaign appearances leave their mark on this year's event.

There is no shortage of controversial issues, ranging from high oil prices to the continuing problem of Germany's competitiveness.

Most of all, fuel costs will come to visitors' minds as they make their way through the halls, past all the high-powered cars that aren't just expensive but also consume massive amounts of gasoline.

"A policy moving away from oil is urgently needed," German Chancellor Gerhard Schroeder said last week, just a few days before the opening of the Frankfurt show. But how is that supposed to happen when there is no sign, even in the long term, that cars' thirst for fuel can be reduced?

What happened to Volkswagen's three-liter car?

Where can we see the fuel-saving technologies that are theoretically available today being put into regular production?

Hybrid technology, fuel cells and hydrogen power are getting much attention. And they are promising for consumption and exhaust discharge. But when will these technologies be applied more broadly?

In the automobile industry, the hope persists that everything will become clearer after the election. As BMW Chief Executive Helmut Panke said, the last thing that the industry needs is "one more orientation phase."

He is no doubt right. The industry has to know whether the value-added tax will be raised. It has to know whether diesel cars with particle filters will be promoted with tax incentives, so consumers and manufacturers can do something to solve the fine particulate problem in Germany.

And the industry has to know whether more money will be available for the construction of new roads.

Question after question. And in the bargain, no politician so far has presented a convincing strategy as to how Germany's position in the auto industry can be secured long term. There have been quite a few proposals.

Current Chancellor Schroeder wants to lower the rate for the corporate income tax, to improve the international competitiveness of German manufacturers.

Chancellor candidate Angela Merkel wants to make the labor market more flexible.

But those are all thoughts about the here and now. With elections always approaching, there haven't been concrete strategies or brave visions.

Top executives in the industry have reasonably clear concepts that they put into practice, in contrast to the political world.

While politicians are still discussing, automotive executives are continually examining their domestic business and restructuring it if necessary, without consideration of long-term agreements.

Last year, it was Opel's turn. And this year, perhaps, well more than 10,000 employees may have to leave Volkswagen.

Now one can only hope that politicians and auto executives in the next legislative session will pull together and present future-oriented plans that secure Germany's place in the auto industry long term.

Source: German Automotive Industry Newsletter - GAI

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