The news came as no surprise to employees at the Volkswagen plant in Zwickau, Saxony. Still, it was a mood dampener. The car manufacturer had already let numerous temporary contracts expire in the past few months. It is now becoming clear that even those whose contracts run until 2025 can no longer hope for an extension. There is talk of 1000 to 1200 employees. The decision should be made in August. A company spokesman points to the low demand for electric cars. Instead of 360,000 vehicles, only 240,000 rolled off the production line last year. “It is important to us to give the employees concerned planning security.” The mood is also bad in other sectors of the economy that politicians like to promote as sectors of the future. The heating manufacturer Viessmann has registered short-time work for its headquarters in Allendorf, Hesse, for July and August. Not all of the 4,500 employees are affected, but around 1,200 are affected. Here too, reference is made to the difficult market situation. After the political tug-of-war over the Building Energy Act and the rush for new gas heating systems last year, many homeowners are waiting. Sales of the heat pump favored by Economics and Climate Protection Minister Robert Habeck (Greens) fell by more than 50 percent to 46,000 devices in the first quarter . The political target remains 500,000 heat pumps per year. Competitor Stiebel Eltron is also doing short-time work; Vaillant is cutting several hundred jobs. The Greens advertised with “Protect the climate, strengthen the economy.” None of this fits at all with the words of the Chancellor, who said that Germany is experiencing growth rates like in the 1950s and 1960s “because of the high investments in climate protection.” has promised. The news situation also doesn’t match the Greens’ posters in the European election campaign: “Protect the climate. Strengthen the economy” could be read there. The transformation currently does not seem like a growth and job miracle, but rather like a job killer. Which leads to the question of when and how this could change again. “Apparently many manufacturers misjudged demand,” says Joachim Ragnitz, deputy head of the Ifo Institute in Dresden. “Excess capacity has been built up.” From his point of view, it has not yet been decided whether this is just a dent or a longer-term problem. Too many influencing factors come into play. The government purchase bonuses for electric cars were abruptly canceled at the end of last year and will probably not come back. The Building Energy Act has been defused, but from 2026 onwards the stricter rules for new heating systems will gradually take effect. And then there is the question of whether the registration ban for new cars with combustion engines will remain in 2035 or whether the EU Commission will relax this. If you ask the companies about their long-term prospects, the answers are unsurprisingly optimistic. A Viessmann spokesman only sees “some headwind in the short term”. In the long term, the trend towards electrification and sustainability offers “an unprecedented opportunity”. The spokesman for VW Saxony calls for a more consistent political approach, not only in Berlin, but also in cooperation with municipalities, for example when expanding the charging infrastructure. “Politicians must set reliable and clear framework conditions in the long term so that investments can be secured,” he says. “An economic policy that is consistently based on the climate protection goals of Paris 2050 is certainly capable of gaining a majority in society and would be a start.”Location costs too high, productivity too lowEconomist Ragnitz, however, points out: “Even if the demand for green products increases again: it is not said that these then come from German production. The location costs are too high, the productivity of the companies is too low.” He sees a trend of companies investing more in countries where production costs are lower. Viessmann announced as early as 2022 that it would invest 200 million euros in a heat pump plant in Poland. The Chinese electric car manufacturer BYD wants to open a factory in Hungary in 2027, while its lesser-known competitor Chery is investing in Spain. “It could well be that the demand for green products will be met primarily through imports in the future,” says Ragnitz. The Federal Ministry of Economics is watching such investment announcements with concern. In addition to the funding commitments already made for battery and chip factories, Habeck would also like to financially support manufacturers of solar modules in Germany. Given the strained budget situation, nothing has come of this so far. Andreas Audretsch, deputy parliamentary group leader of the Greens, sees an increased need for action in view of the current news about job cuts and short-time work: “In order for the economy to run smoothly and to maintain and create well-paid jobs, we have to invest in new climate technologies, in infrastructure, in research and development.” , he says. “The future budget must reflect this.” In his opinion, the traffic light coalition has already made progress in reducing bureaucracy and recruiting skilled workers. “We are working on more of this.”More on the topicIfo researcher Ragnitz thinks little of supporting production in Germany with more and more subsidies. “The products must impress with their technology and competitive prices,” he says. Politics should concentrate on promoting innovation. “And it should make it clear to people: our level of prosperity depends on our willingness to perform,” adds Ragnitz. “Retiring at 63 was a mistake, and a four-day week is certainly not possible.” Jürgen Matthes, Head of International Markets at the employer-oriented Institute of the German Economy in Cologne, goes one step further. “It is an illusion that the future lies solely in renewables,” he says. “Perhaps we should keep the combustion engine here, continue to develop it as we have done before, and then see where the journey takes us worldwide.” Combustion cars will probably be driven for a long time in many regions of the world, he predicts. “But if we no longer have a sales market for this in Europe, production will move to where the customers are. We should prevent that.”
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