Germany's Auto Industry Moving Forward, while Some in Congress Want to Throw U.S. in Reverse
How is Germany able to retain its manufacturing jobs, while those positions slip away in the United States? The answer to that question can partly be found on the floor of the 2011 Frankfurt Motor Show, which opens to journalists last week. Arguably the most important showcase of advanced auto technology in the world, the Frankfurt car show is brimming over with cleaner and greener new models and concept cars from German automakers.
The show, and Germany’s manufacturing prowess, should send a clear signal to Congress that the U.S. needs to move faster, not slower, with new auto standards and retooling its auto industry. But there are some who don’t seem to get it. The National Auto Dealer Association is actually calling on Congress block implementation of strong pollution and fuel economy standards that besides saving drivers money and reducing our dangerous dependence on oil, will create tens of thousands of jobs. And some in Republicans in Congress want to take away $1.5 billion in funding from the highly successful auto retooling loan program (“Advanced Technology Vehicle Manufacturing Program, Section 136).
Germany is where the innovation and jobs are
“Today, all the innovation in the auto industry is coming from the German manufacturers,” said Vianney Rabhi, head of strategy for MCE-5, a French engine development company, in an interview with the New York Times. “A little from Japan. None from the U.S.”
And make no mistake about it: Innovation is the key to the future of the automobile. German models on the Frankfurt showroom floor are shining examples of the country’s efforts to lead the global race for the next generation of fuel-efficient cars—models that help make the transition from fossil fuels to renewables. This will help Germany meet Europe’s tough long-term pollution standards. By producing electric-drive vehicles—like hybrids to pure electric cars on display in Frankfurt—Germany will also extend its manufacturing base that already stands at nearly one-quarter of its economy (versus the U.S. at about 11.7 percent).
In fact, Audi—Volkwagen’s luxury brand—had so much to unveil that it built a new exhibition area (complete with test track) to show off its products. The idea is designed to give Frankfurt Motor Show patrons a view from behind the wheel of innovative models, such as the electric version of the A2 four-seater (complete with efficient LED lighting) and the brand’s all-electric urban concept car. Volkswagen itself will show its NILS concept—also a small urban EV—as well as its new lineup of small efficient cars, called Up. BMW will put the spotlight on its upcoming new line of premium plug-in electric cars, including the i3 compact and the i8 plug-in hybrid sports model.
This transition is not made by industry alone. It requires a government role in establishing standards for efficiency, emissions, and market adoption of viable alternatives. Europe already requires its automakers to produce vehicles that are much more fuel efficient than our cars and is moving forward with 2020 standards as high as 65 mpg.
Potential roadblocks in Congress to a resurgent U.S. auto industry
Germany’s direction stands in sharp contrast to the direction the U.S. until recently has been moving in. President Obama’s proclamed at his recent address to Congress: “We’re going to make sure the next generation of manufacturing takes root not in China or Europe, but right here, in the United States of America.”
President Obama clearly understands that building the manufacturing base in the United States is one of the keys to job creation. Experts believe that each new manufacturing job generates two to five other jobs in the U.S. economy—with the multiplier for auto industry jobs is closer to nine times based on recent study by Ceres. It’s disconcerting to see that manufacturing has slipped to just 11.7 percent of U.S. gross domestic product, compared to nearly 30 percent in the 1950s.
Ron Bloom, who served as the Obama administration’s senior counselor for manufacturing, laments, “If you let manufacturing go, over time that will have a negative gravitational pull on innovation.”
The good news for U.S. auto industry manufacturing
There is good news for the U.S. auto industry: According to a joint UAW, NRDC and NWF study, there are already 150,000 jobs in the U.S. auto supplier industry alone related to manufacturing fuel-efficient technologies. According to DOE, the federal retooling program has provided out $9.1 billion in badly needed capital that has helped save or create tens of thousands of jobs. Finally, like Europe, the U.S. finally has clear, long-term targets for increasing vehicle efficiency of its cars (54.5 mpg by 2025) to allow for planning investments in advanced drivetrains.
By using less gas, the next generation of American cars will save U.S. consumers from the sting of $100 fill-ups at the gas pumps. It will mean less global warming pollution and cleaner air to breath. It will make our carmakers more competitive in a global market that places increasing importance on efficiency. And it’s the lynchpin of strategy to create the manufacturing jobs the U.S. auto industry needs to thrive in the 21st century.