Germany Prepares for the 'Painful' End of Internal Combustion

Illustration for article titled Germany Prepares for the 'Painful' End of Internal Combustion
Photo: BMW

BMW and the other German automakers will dump billions into getting factories and workers ready for the electric car revolution, Nissan’s Carlos Ghosn has some health issues that could interfere with his trial, the United Auto Workers try again with Volkswagen and so much more for The Morning Shift of Thursday, April 11, 2019.


1st Gear: The Move to EVs Won’t Be Easy

The industry-wide push toward electric vehicles, I believe, is a vital and necessary one for all sorts of climate, energy sustainability and business reasons. But do not think getting there will be simple or cheap.

Besides the obvious questions over things like range, charging networks and demand for EVs in markets outside of China (the country that’s largely driving this trend) there’s the massive R&D investment costs for car companies to shift away from internal combustion—and to train workers to do that. Not all auto jobs will survive this transformation and not all auto brands will, either.

Bloomberg today has an excellent deep-dive on the challenges facing German automakers in general and BMW in particular. Germany, perhaps as penance for various diesel cheating scandals and seeing the inevitable end of that fuel, is leading the transition away from traditional engines. It’s a huge change for the country that effectively invented cars and internal combustion.

First, this story starts with just how different EV powerplants will be than even the best of the best current BMW engines:

The completed combustion engine fitted into a BMW M5 is a 1,200-piece puzzle that weighs more than 400 pounds. There are about 150 moving parts whose interlocking precision can catapult a six-figure sports car to 60 miles per hour in 3.3 seconds. The engine hulking under the bright lights of the vast BMW factory hall in Dingolfing, Germany, has come together from a web of hundreds of suppliers and many, many hands.

The electric-vehicle motor produced in the same factory is different in almost every respect: light enough for a single person to lift, with just two dozen parts in total, and lacking an exhaust, transmission, or fuel tank. The battery cells themselves are mostly an industrial commodity, products bought in bulk from someone else. No one brags about the unique power of BMW’s electric drivetrain.

Yet this slight battery-driven motor can outgun the combustion engine in BMW’s fastest performance car from a standstill at a traffic light.


Intriguing for sure. But you’re talking about a vastly different product and production process than has been used for the past century, and getting workers there alone is going to be difficult and expensive:

Last month, expecting a 10 percent slump in profit this year, the company said it would begin a 12 billion-euro efficiency campaign to pay for this battery-focused revamp. Starting in 2021, meanwhile, BMW plans to eliminate up to 50 percent of drivetrain options.

About a third of its 133,000-strong workforce has been trained to handle production of electric vehicles—and it’s clear that all of today’s employees won’t be necessary for tomorrow’s tasks.

Manuel Simeth has tried to make himself futureproof. He jumped into the new era ahead of most of his colleagues, earning an electric flash on his uniform to show he’s been trained to handle the dangers of working in a high-voltage environment. The father of two has a stubbly beard and stands over a neat stack of silver battery cells. He checks the fit of a black lid atop the power pack that will drive one of BMW’s electrified models.

Simeth ended up in batteries after facing the prospect of losing a previous job to a less-epochal change. BMW decided in 2012 to start sourcing car seats from outside suppliers, and the battery-assembly group then in its infancy seemed safer than staying put. “I’ve had the experience,” he says of working in a role that everyone knew would become outmoded and, inevitably, eliminated. “That’s a depressing feeling.”


And then there’s the fact that this future of cars relies on battery cells usually outsourced away from the automakers themselves, and from a small number of typically Asian firms. In other words: The electric cars of tomorrow will have a lot less “potential for differentiation” as they all use the same batteries from LG Chem, Samsung, Panasonic and others.

Right now, BMW alone makes 16 different engines with hundreds of variants, as that story notes. The future will be vastly more simplified, and that means big changes to the job market:

A joint study by Germany’s powerful IG Metall union and the respected Fraunhofer Institute for Industrial Engineering concluded that 75,000 of 210,000 positions across Germany in engines and transmissions will be obsolete by 2030, even as electrification will create about 25,000 jobs in that time frame.


Necessary? Probably, yes. But easy? Far from it. That story is worth a read in full.

2nd Gear: Tesla’s U.S. Battery Expansion Halted

Speaking of batteries and demand for them, Tesla may be facing a little setback. Its partner in the U.S. Gigafactory, Panasonic, is hitting pause on an expansion plan for now, citing uncertain demand for electric vehicles. From Bloomberg:

“Panasonic established a battery production capacity of 35GWh (gigawatt-hours) in Tesla’s Gigafactory 1 by the end of March 2019 in line with growing demand,” Panasonic said.

“Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla.”

Tesla and Panasonic had intended to raise capacity 50 percent by 2020 to the equivalent of 54 gigawatt-hours, but financial problems forced a re-think, the Nikkei said without citing its sources. Panasonic also intends to suspend planned investment in Tesla’s battery and EV plant in Shanghai, and instead provide technical support and a small number of batteries from the existing Gigafactory, the newspaper reported.


Tesla is facing multiple issues with deliveries and critics in the U.S. warn of what they feel is softening demand for the Model 3 in particular, especially as the $7,500 EV tax credit goes away.

This also isn’t the first time Panasonic, a massive and conservative Japanese electronics giant, has expressed concern over Tesla:

Panasonic President Kazuhiro Tsuga’s bet on Tesla has also been a source of concern as the carmaker went through what Musk called “production hell” ramping up output of the Model 3 last year. While production at the Gigafactory in Nevada has improved and sales have climbed, the business has yet to become a major contributor to earnings.


A Tesla spokesperson told Bloomberg it will continue to invest in Gigafactory 1 but “there is far more output to be gained from improving existing production equipment than was previously estimated.”

3rd Gear: Ghosn Faces Interruptions in Kidney Failure Treatments

Yet another layer to the ongoing Carlos Ghosn criminal proceedings in Japan has emerged: The fact that the deposed former Nissan-Renault megaboss apparently suffers from chronic kidney failure. And his defense lawyers are calling Japanese prosecutors “inhuman” for allegedly interrupting his treatments for his latest arrest, supposedly to elicit a confession, Reuters reports:

Carlos Ghosn’s “illegal” arrest has interrupted his care for chronic kidney failure, which has plagued the former Nissan boss because of treatment for high cholesterol, his defense said in documents seen by Reuters on Thursday.

Ghosn’s defense team, in documents prepared after their client was re-arrested by Tokyo prosecutors last week — and the details of which have not been previously reported — allege the latest arrest was designed to interrupt the defense’s preparation and force a confession.

Tokyo prosecutors declined to comment when contacted by Reuters.

[...] Ghosn has high cholesterol and, as a result of treatment, suffers from chronic kidney failure and rhabdomyolysis, the defense said. Rhabdomyolysis is a syndrome where muscle fibers release their contents into the blood stream.

Interrupting his treatment for the “convenience of prosecutors’ investigation” was “inhuman,” the defense said.


Japanese law enforcement officials also watched Ghosn’s wife shower and go to the bathroom?

The documents also include an account from Ghosn’s wife, Carole, who said prosecutors prevented her from contacting her lawyer on the morning of her husband’s re-arrest.

She said she was repeatedly subjected to body checks, forced to keep the bathroom door open when using the toilet, and that a female investigator was present in the bathroom when she undressed to take a shower. “I felt that they were humiliating and coercing me with these inhuman actions,” Carole Ghosn said in her account, dated April 4, the day of her husband’s re-arrest.


They don’t fuck around over there.

4th Gear: The UAW Tries Again with Volkswagen

The UAW has tried and failed repeatedly in recent years to unionize and get bargaining rights for the workers in the Chattanooga, Tennessee Volkswagen plant, where the Passat and Atlas are made. Now workers there are trying again, according to Automotive News:

A group of hourly employees at Volkswagen’s Chattanooga assembly plant filed a petition Tuesday with the National Labor Relations Board seeking an election to form a union affiliated with the UAW that would potentially cover more than 1,700 hourly employees at the plant.

According to the filing, the potential union would cover “all full-time and regular part-time production and maintenance employees” at the plant, including all production and skilled team members and leaders. The Chattanooga Times Free Press first reported the filing, and said the union seeks to hold the election in late April.


Here’s the backstory, from the Chattanooga Times Free Press:

In 2014, the union lost a vote of the plant’s workers by a margin of 712 to 626.

In 2015, the UAW won an election involving a much smaller unit of workers by a vote of 108 to 44. Those maintenance, or skilled trades, workers fix and maintain the equipment at the auto plant that makes the Passat midsize sedan and new Atlas SUV.

But VW appealed the second election result and has refused to bargain with the so-called micro-union, claiming it wanted the entire group of production and other workers to vote. That case now sits before the NLRB.

Cochran said plant employees now work under a community organization engagement policy that enables groups to dialogue with factory officials.

But, he said, while the policy permits workers to make suggestions to the company, it doesn’t have to act.

“Until there’s a contract, it’s just suggestions,” Cochran said. “Maybe it follows through and maybe it doesn’t.”


The UAW has struggled lately with unionizing new plants, retaining members, losing American jobs to foreign operations and high-profile corruption scandals. At the same time non-union American plant workers are paid less and often have a higher injury rate than their unionized counterparts.

The Chattanooga VW plant is the only one of that automaker’s plants that isn’t unionized. Will the pro-union employees succeed this time?


5th Gear: Ford CEO Ready for Recession, If That Happens Again, Ah Crap It Might

A big part of the restructuring we’ve seen at General Motors and Ford over the last two years—cutting plants and vehicle lines entirely, stock buybacks, layoffs of white-collar workers, and so on—has been touted as shoring up these businesses while they’re still healthy, and profitable. Do it now so you’re ready for an economic downturn, if that happens, even though such an outcome has been heavily implied.


Here’s Ford CEO Jim Hackett being even more blunt about a forthcoming recession, as quoted by the Detroit Free Press:

“You have to get the business designed to be fit,” Ford CEO Jim Hackett told a crowd of 400 at a Detroit Economic Club lunch at Ford Field on Tuesday. “Part of this mindset is not to be recession-proof. It is to say, ‘Come on, recession, we’re ready for you.’ Ford will be ready for the recession.”

In an effort to overhaul the 115-year-old company, he talked of changing a culture that moves slowly and running a pilot project that cut in half time it takes to special order a vehicle and get it from the factory to dealership. Customer wait time shrinks and dealers hold fewer unpurchased cars on lots.

Thinking about everything differently and making big changes are essential to the success of Ford and all its competitors, Hackett said.


“Recession? Bring it,” the story says. No, don’t bring it! It was so shitty last time, don’t you remember? Rad to hear this treated like a foregone conclusion. Can’t wait.

Anyway, this all speaks to the stuff in 1st Gear—not every car company is going to survive the next few years, whether it be through economic downturn or the challenges of electrification, or both.


Reverse: Keep Love Alive


Neutral: Will Brands Matter When EVs Are All the Same?

Imagine a future when BMW, Mercedes, Tesla, GM and more all use the same battery packs. Engines are largely a thing of the past, except probably as niche enthusiast vehicles or as industrial ones. Will it matter what car you buy?

Editor-in-Chief @ Jalopnik, 2015-2019.



The average consumer has no idea what’s under their hood or who made it. They want it to work, be cheap to run, and be powerful and they don’t care how that’s done. The biggest compliment engines usually get are about them being smooth and quiet which are hallmarks of electric motors.

The only things that are keeping more people (Americans) from adopting electric vehicles are: they mistakenly worry that the batteries will run out and strand them since they think they take 300mi+ trips all the time; and they are afraid of change. Some impetus is required to overcome these hurdles and in the past that was tax incentives and in the future it will probably be gas prices.