Comment by zerof1l
4 months ago
Germany desperately needs a wake-up call in the form of recession. German car industry has been non-competitive for multiple years now. Instead of letting it fail, the government kept on flushing money down the toilet and prolonging the inevitable.
For a business, there's no incentive anymore to choose Germany over other EU countries. Cheap energy is gone. Germany is literally collapsing under its own weight: endless bureaucratic structures that just keep on growing.
> Germany desperately needs a wake-up call in the form of recession. German car industry has been non-competitive for multiple years now. Instead of letting it fail, the government kept on flushing money down the toilet and prolonging the inevitable.
Just let it fail? I'm reminded of this, which I read recently about rare earths:
https://www.nytimes.com/2025/10/12/business/china-rare-earth...:
> Rare earth refineries and magnet factories all over the world have been buying Chinese equipment for the past 20 years. Many equipment vendors in North America and Europe closed when most of the world’s rare earth mining shifted to China in the late 1990s.
I'm sure that, at the time, people were saying that North American and European rare earth equipment manufacturers were "non-competitive for multiple years now."
They would likely have been correct.
Don't get me wrong, I agree there is such a thing as "forget the comparative advantage of trade, this is national security", and I even think steel and cement need to be in that category right after farm subsidies, but also you do have to be strategic, and you don't want private corporations "too important to fail" which turn subsidies into shareholder returns without adding real value.
And even more, if someone does buy into today's expanded definition of national security, keeping industries safe from Japanese or Chinese style zombies is a desirable thing.
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What metrics are you using to label it as non-competitive?
Cheap russian gas is gone, so now all industry sectors (not only cars) are not as competetive as before.
They are now downsizing, etc in order to save themselves.
Do you know that German car manufacturers have factories worldwide (except Porsche)? And they are still quite profitable.
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Energy prices? Unit labour costs? Pisa Scores? VC Investments as percentage of GDP? Number of IPOs? Taxation of Income? Punctuality of public transport?