TheBigPond - spotlight on what South African business and business people have been up to in Europe. Edited by South African journalist Christo Volschenk from Stuttgart, Germany. Note: This blog has migrated to a new home at www.thebigpond.eu.
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Wrong call, Frau Merkel!

The siding of Chancellor Angela Merkel and her government this week with the German car manufacturers against an EU commission trying to force EU car manufacturers to produce "cleaner cars" (more environment friendly) was disappointing, to put it mildly.

Because I always thought Frau Merkel was the exception to the typical-politician rule, in the sense that she kept her eye on the longterm and avoided decisions of the shortterm-good-longterm-bad variety. And because I thought she was a clear thinker.

But, her decision to side with the car manufacturers against the EU and cleaner cars, is a bad one. Not only does it sacrifice the longterm for the good of the shortterm, but it underestimates the extent of "uneasiness" of "the people" about climate change, underestimates the speed with which this "uneasiness" is building and reeks of "muddled thinking".

Chances are Frau Merkel, her government and the car manufacturers in Germany will be rudely shaken out of their "Cinderella sleep" in the near future. The effects and results of climate change may well be the catalyst.

So, clever one, what is this "muddled thinking" thing you are throwing against Angela's head?

Simply this: At Davos and again more recently, she was on German TV saying "the EU can't save the world from climate change on its own....the rest of the world also had a responsibility...and a part to play....and in any case, the EU is only responsible for 15% of global CO2 emissions (a big co-reason for global warming)...so, even if the EU got it's "environmental house" in order it would not "save the situation" (this was in broad terms what she said).

Nein. The 15% is wrong. Because it's wrong to only look at what is emitted inside the borders of the EU. Especially, if your car sector has been world-leaders for decades and "export world champion of cars" for years.

In this circumstances Germany (and the German government) has a special responsibility to ensure they don't export "environmental time-bombs" (which their Porsches and most of their other bigger cars are...), because this really means they are "exporting environmental problems" around the world.

In the circumstances I would have expected Frau Merkel to take a VERY tough stance against her car manufacturers, saying they should stop lagging the world's car manufacturers when it comes to producing cleaner cars and stop dragging their feet when it comes to working on alternative engines.

The EU commission's proposed deadline for tightening the CO2 emission ceilings is 2012 - a full 5 years from now. This is a very realistic and easy target for the German car manufacturers to reach. Or should be, if they wanted to...

But, it's not really up to them to decide whether they want to, or not. Rather: If the German car companies don't come to the market with a (genuine) "clean alternative" before 2009, they will be boo-ed off the stage by "the people" (who are ready for clean cars) after that point and they will lose the race against some other "Amazon.com-like" "sluiper-in-die-nag" who'll lead the world with its next generation car.

In this sense, the point of Frau Merkel about "thousands of jobs which will be endangered if the EU plan goes through" is really completely off the mark.

If the German car companies don't pull up their socks, thousands of jobs will be lost, Frau Merkel.

It's about what the German car companies are NOT doing, not about what the EU commission wants to do.

Beware, you're siding with the "Täters", Frau Merkel.
2.2.07 19:57


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The threatened German car industry - Revisited

The problem with being an "armchair economist" is that one is often not right. Well, OK, I'm soft on myself. I should say: One is often plain wrong.

Of course, that makes being right about something all the sweeter. And this has just happened to me. So, I'm cracking the bottle of Shiraz from South Africa I just bought - even though it's in the middle of the day.

What is this all about? It concerns my last "observation" (see previous two contributions about the German car industry) and the best magazine in the world - The Economist.

The Economist is manned by what I would call "quasi-armchair economists". The magazine is full of observations, but of the type which is backed by (a whole lot of) analytical, empirical and academic substance. Theirs are not the pure "sit-back-and-feel-your-gut" type of observations I make.

I subscribe to this magazine (of course). Have been since 1987, when it could be had for R5 per copy in South Africa. Now it costs R35,00 per copy back there. (But that just by the way.)

The latest edition just landed in my mailbox and....what's on the cover? A story about how the German car industry is getting it wrong. And notably, how it is failing to notice that people are getting more and more uncomfortable about driving "big, dirty, environment-unfriendly cars" (which Germany mostly produce).

In short, it's about the German car industry missing the boat for the next era of cars - let's call it "Car2" (Why not? If there can be a Web2...)

So, I was spot-on with my observation. I even beat The Economist to it by 4 weeks.

Now, my experience (another observation) here in Germany is, that the best local weekly business magazine is WirtschaftsWoche (not only because it's HQ is 300 meters away from my front door). And it usually follows The Economist on "major trend articles" like these with a lag of 2 to 3 weeks. (I also subscribe to the WirtschaftsWoche).

So, there we have something to be on the look-out for again: Three weeks from now the whole German media industry should be focused on one theme: What Germany's car industry should do to catch up and retain its dominance in the Car2 era?

I hope to be right again....this Shiraz is tasting "fokken lekker".

And for those who don't understand what all the fuss is about: If you're a slightly older music-lover, you'll remember how quickly the world discarded LPs when a better technology came around (casettes). And again when CDs came around. Within one year no-one in the world even thought about buying anything else than casettes, or later CDs.

Now, the world has been waiting for a "clean car" for a while, to put it mildly. Some might even be getting a bit edgy, seeing that there was almost no snow in Europe this winter....

My guess is: When the new technology car comes around, you'll see people swopping their old, smokin' gallopies for Car2 era vehicles faster than you can say "Shiraz is super".

And no-one will care if these cars are not made in Germany....
24.2.07 17:34





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