Michael Stoschek wrote a letter to the Bavarian Prime Minister Markus Söder in May. In it, the Chairman of the Board of Brose warned of an economic slump in the automotive industry and massive job losses and called for help from politicians. The subsequent government stimulus package was a disappointment for the entrepreneur. In an interview with Personal-Financial.com, he lets his frustration run wild.
What was the reason for the letter to the Bavarian Prime Minister, which you also made public?
MICHAEL STOSCHEK: Brose is the second largest automotive supplier in Bavaria and I am very worried about our jobs. In addition to the anti-car attitude in Germany, which has caused great uncertainty among buyers, there are now the effects of the corona pandemic. Orders for new cars have plummeted and a noticeable purchase aid would have helped to secure jobs as well as the climate.
What is the concrete situation in the Corona pandemic at Brose?
Fortunately, we have the health of our employees under control, but not employment. We anticipate a 25 percent drop in sales this year, which would mean a complete loss of our operating result. There are forecasts that we will not return to the level of 2018 until 2030. In this case, above all, we would have to cut jobs even more clearly in Germany than was previously planned. Before Corona, the industry was still dealing with the declines in automobile production from 2018 and 2019. Now the overcapacities are suddenly becoming much larger.
What exactly do you mean by an anti-car attitude in Germany?
For years, the automobile has been the target of mostly unjustified criticism. Individual locomotion does not match the social ideas of part of our society. The automobile was invented in Germany, German vehicles are in demand all over the world. Our industry creates hundreds of thousands of well-paid and high-quality jobs in the country, over 800,000 people are directly employed in the auto industry. 2.5 million jobs in Germany are directly or indirectly dependent on the car and our state receives over 90 billion euros in taxes from our industry every year. In contrast to the French government, our coalition saw no reason to support the buyers of German automobiles and the jobs in our industry noticeably and with a wide range of technologies. Every constructive and factual position was missing.
In your opinion, what would be the factual position?
The most factual thing would be to orientate on facts. For example, the emissions behavior of our vehicles has improved massively for decades. If you look at the entire value chain, the CO2 emissions of the most modern combustion engines are now at the level of electric cars. Anyone who moves a vehicle with an electric drive in Germany does not help the climate because the energy for the charging process is still largely generated from fossil fuels. Added to this are the CO2 pollution and the environmental problems in the production of the battery cells and their disposal. It was not possible to convey these undisputed facts via the media to politics and the public. In this respect, opponents of the automobile have a clear field of fire as long as the industry does not resist.
Why is it that the industry is not fighting back?
Of course, some manufacturers made mistakes in exhaust gas treatment. They should have been openly acknowledged and regretted. Industry and individual companies should have made more intensive and credible efforts to regain consumer confidence. That would have created the prerequisite for being able to go public more confidently afterwards. It cannot be that our industry in Germany has since been accused of producing dirty slingshots. This is not objectively tenable.
The one-sided euphoria of politics for electric drives ignores the consumer. A good three percent of buyers have opted for an electric vehicle since the beginning of the year. I am afraid that this will not change significantly, even if you massively increase the purchase premium again. The practical disadvantages in operation are crucial for consumers who can only afford a single vehicle. Limiting the vehicle value to 40,000 euros also now supports above all the sale of foreign electric and hybrid vehicles. This is what the economic stimulus package looks like for the German economy.
The Federal Government has deliberately waived a purchase premium for combustion engines. What would have been your way?
This decision is absolutely incomprehensible, wrong and downright fatal. The German manufacturers offer the latest exhaust technology for internal combustion engines, which avoid the disadvantages of electric vehicles described. The cars in the existing fleet could have been classified according to the year of manufacture and emission levels, and the premium could then be staggered in order to remove the vehicles with the highest pollutant emissions. That would have had the fastest and greatest environmental and climate impact. Now I fear that uncertainty will remain and that demand will hardly be boosted.
Critics say the auto industry overslept the transformation. It would have been a mistake to give her purchase bonuses for an outdated technology. What do you say to them?
In the sum of all properties, including the costs, I do not think that combustion technology is outdated. In large parts of the world, especially in less densely populated regions, people will only be able to use mobility for decades to come.
An important reason for the focus on electric cars is the CO2 requirements from Brussels.
The European CO2 targets were decided long before the Corona crisis and I very much hope that the decisions will be adapted after the Corona pandemic has changed the economic and social situation so dramatically and will continue to do so. To meet the requirements, orders for electric cars would have to increase to around 20 percent. If the consumer does not take part, there are two options: Either the car manufacturers have to pay totally inappropriate penalties or the EU is changing its mind and adjusting its climate targets. The current CO2 regulation by 2030 provides for a review of the requirements and target achievement halfway there. That would be the perfect opportunity to adjust.
Do you believe the goals will be postponed?
I hope so and I can only wish it. The greater the economic crisis, the greater the pressure on politicians to rethink their priorities. The climate is important, but it cannot be the only goal to which everything else has to be subordinated.
The interview is published in short in Personal-Financial.com 7/2020. interested in Personal-Financial.com? Click here for the Subscription shopwhere you can order the print edition. Our digital edition is available at iTunes and GooglePlay