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The Peter Zeihan Podcast Series

The German Failure & Volkswagen || Peter Zeihan

Dec 12, 2024
Germany's automotive industry is facing serious challenges, with Volkswagen as the focal point of scrutiny. Strikes and dwindling demand, exacerbated by fierce competition from Chinese manufacturers, threaten its future. Meanwhile, a looming workforce shortage due to retirements raises questions about the sustainability of the sector. This opens doors for skilled Germans to migrate to the U.S., potentially alleviating American labor shortages if migration policies are adjusted.
05:17

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Quick takeaways

  • The German automotive sector, exemplified by Volkswagen, is struggling with declining demand, energy price surges, and labor shortages due to demographic shifts.
  • The industry's shift towards electric vehicles is hindered by consumer skepticism, further complicating the challenges faced by Germany's economic framework.

Deep dives

Challenges Facing the German Auto Industry

The German auto industry is facing significant challenges, primarily driven by a sharp decline in demand for vehicles, coupled with the repercussions of the Ukraine war. Major automaker Volkswagen has been struggling after a series of scandals and now seeks to reduce its manufacturing footprint, which has led to strikes among its workers. As energy prices soar due to the loss of affordable Russian gas, chemical companies are dismantling their operations in Germany and moving to locations with better economic conditions. This downturn not only impacts the auto sector but also threatens the viability of the entire German industrial landscape, with many workers concerned about job security amidst company closures.

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