My father was a cash register repairman in the 1960’s. He saw the handwriting on the wall when transistors started replacing mechanical parts. He moved the family to NCR headquarters in Dayton and was retrained as a coder. But he was virtually the only one; everyone else lost their jobs. The company shriveled to from a large conglomerate competing with IBM across product lines to a niche brand making ATMs.
I can see a lot of Germans coping in the comments how net salary is much smaller actually, how rent and groceries are larger than in China, how German cars are better quality etc. IT DOES NOT MATTER!!! If there is no market, no buyers then it does not matter. One of the first thing I learned as an entrepreneur is don't create a product nobody wants to buy.
Nobody is talking about FIRE (finance, insurance, real estate) sector eating everyone's lunch. And taxes. In Germany as in much of Europe, the state takes 50% of your gross income. And then from what's left you pay 30-50% for your apartment rent or credit. And let's not forget Germany's suicidal energy policies. This is what is destroying the Western industry. Most of the industries in Europe, especially those which consume a lot of energy will go the VW path. Bankruptcy. That's what happens when you have idiots and quislings in charge.
@@thewolf9851 You are commenting under a video about Volkswagen's big problems with selling cars that are forcing it to close several factories in Germany. Just saying.
7:25 "Labor cost in Germany are 79 E/hr, that's like getting PAID 150 $/hr in Australia". Not exactly PAID 150/hr. Keep in mind, labor cost include all the benefits like insurance, pension etcetera. Workers are not getting 79/hr in their pay check, the TOTAL labor cost includes the wage plus everything else. Love your channel, sir keep up the great work!
I live in Germany and in my region (South West) there are a huge number of car manufacture suppliers. I work in one of the many. I can say at least for the suppliers the average wage of a production worker is 20€. That is a normal wage here and one has even to keep an eye on one's spending with that wage. Most of us are facing now (many already) short term work and if the situation prolongs which I think it will, then lay offs. A lot of people here are getting increasingly nervous. I personally see the situation in this country as hopelessly doomed. And I'm trying to be optimistic.
@@johndoe-bl8yd that's a lie. As far as I have heard, workers in VW, Mercedes, and Co. earn more than us but its around 30€ an hour. That's good but still a far cry from 130k a year.
@@johndoe-bl8yd They didn't say that. They are saying factory workers cost the company 130K a year. A worker cost a lot more than their salary, you got recruiting cost, pension cost, training cost, benefit cost, legal cost, etc...
Labour costs at the factory where cars are put together only accounts for about 5%. It'll affect the price by a couple 1000 for sure. But bad management is the real reason they will be going under, not labour costs.
🇩🇪 for decades have been making mediocre cars and sold at a hefty premium because of the myth of superior engineering and quality. Like 🇯🇵 they have had it too good for too long. About time 👎
Having lived in Germany and worked in the auto industry there, in previous downturns, the industry would kick and scream but eventually make the necessary changes to make the cars more competitive with Asian brands. Adding Air conditioning, cup holders or electric windows as standard, for example. Fairly easy stuff although it always took a crisis for something to happen. Labour strikes would largely be avoided by increasing wages and/or cutting hours, keeping the workforce intact (hardly ever any layoffs). Now, there are fundamental changes in vehicle manufacturing and German companies were asleep at the wheel. I'm not sure they can catch up this time.
As you said, 7000 per vehicle in Germany vs China less than 2000, in worst case scenario that is 5500 more cost per vehicle. Still there is no explanation why same car in Europe is 20000 more costly than in China (taking here about VW vehicles, not imported ones).
VW gave billions in dividends to the owners, instead of upgrading production lines. The cost isn't labor cost alone. I understand the workers. They should confiscate the factories and focus on production instead of profit maximization
Why upgrade production lines if you still have to pay the workers you don't need any more? Maybe confiscating the factories can at least get you put in a nice prison where the meals and accommodations are free.
Yeah but that's not because tesla offers its workers enough job loyalty protection... Musk is just evil. Billionaires don't like normal workers - they just use them and throw them away. Workers do need protections from fiends like that - union or not.
It's not even that high in The Netherlands. And we have a fairly good economy. Our minimum wage is around 1200 euro. It is also aged based, so the older you are the higher your minimum wage. It scales by law, but Germany seems like an outlier
And why is it so high? Renting prices are going through the roof and taxes are insane. Except for rich people who pay way less taxes. Sounds familiar, right? Germany needs a lot of restructuring… but no one wants to change anything. And so we keep the system running as is until it crashes.
sounds like everyone in the German auto industry can take a %15 haircut and not miss a beat (especially after taxes) ,and yet here they are bickering . but, if blame was to be shared, I give 70% to management (and the shareholders). They are the ones who are supposed to see this coming and plan for it. They got rid of people who tried to warn them
The decisive factor is not the wage costs. Here in Switzerland, wage costs are twice as high as in Germany. Nevertheless, Switzerland is competitive. At the end of the day, productivity counts.
Whoever closes, please open in Thailand, the Thai car market still has some places for affordable "real European brand" cars/EVs, for people that want to avoiding Chinese EVs.
The German assembly workers can make a fresh start moving to Chinese cities and becoming seasonal hand car wash specialists in reparation for doing business for decades with the Chi-Coms.😂😂
We work at a sanding company and deliver Auto parts to these companies perfect for painting, and our company pays us 14 to18 euros per hour.... We talking about different Germany or what!!!
Wage costs are not the important measure. Productivity is the important measure. If someone costs twice as much as someone else but is 3 times as productive, then the more expensive employee is actually cheaper in terms of efficiency.
The 'Gernan Engineering' myth is over, they have to face the consequence of high labor cost, dated technology, lack of factory investment, bad management, etc.
The real problems are high energy costs due to the stupidity of closing nuclear power down and the loss of cheap gas from Russia together with lack of demand for electric cars they are committed to produce. All self-inflicted issues resulting from left wing government policies.
Germany is a country or old entitled people. Young don't wanna work since taking social support pays more than working. Really. If you have wife and 3 kids it's BETTER not to work.
@@thewolf9851There are multiple Big Markets now. China, Mexico , Vietnam, thailand, India are all low cost markets that have capability to develop their own cars.
Sam, an important thought about cost is not just the labor cost per hour but the labor hours per car. As Tesla is demonstrating with the Mega-cast idea, instead of 70 parts in the rear end make it 1. This should help in crash repair cost too, in the long run. How about the Bots that will be doing more of the human functions?
I’m all in favor of auto workers making high wages, executive management need to drastically reduce their wages. People praise the low wages of Chinese workers, while they struggle to survive while their executives make hundreds of millions and live like kings. We need more equal wages.
In Germany the cost for employers are much higher per employee, this is called Lohnnebenkosten. The average worker gets (before taxes) Most likely less than 40 Euros per hour. The 1xx Euro per hour seems like Accounting shenanigans.
Exactly this, cost of labor is cheap in China and high in Germany. This isn't surprising at all. It's like comparing cost of labor in California vs Mexico
@@xen.7140 As far as I know, the labor cost in India is much lower than that in China. But I don't see the goods made in India selling all over the world. VW's factory in China employs the same Chinese workers (not German workers), but their sales are declining.
@@jogana6909 India is a completely different story. India has it's own developed business process offsourcing industries like call centres that companies frequently use due to very low cost of labor. Even large companies like PayPal have most of their customer service in India. You wouldn't build call centres in Germany where the average pre-tax salary is 3000 euro. VW's sales would be declining even if 100% of their factories were in China. In fact, they just recently sold a factory in China. The issue is much larger than that and has to do with unprofitability of their factories. As referenced in the video, it costs VW a lot more to build a car than other manufacturers (about 3 times as much on average). VW employees are more costly than even Porsche and Audi on average, and there's over 100,000 of them. This was not an issue while car sales were at an all-time high a few years ago. The decrease in sales is also largely due to high leasing rates at the moment, car sales are significantly lower than they were in many years and at the same time VW is suffering losses in billions + having to outcompete Chinese manufacturers who are arguably operating at a loss.
I wouldn’t want to drive any of their cars. The 2 VW’s I did own, the plastic in them cars deteriorated at 8 years old. The cars are crap. This morning I’m driving my kids to school and can’t wait to get in the Tesla…
one cannot underestimate the double whammy of EV mandates and tax breaks for EVs. Governments are literally ramming EVs down our throats. The question is why?
I find those German salaries unreal! I grew up in a GM town in the UK, so most everyone I knew worked for Vauxhall at one time or another. The few people I know who still work on the shop floor there make the equivalent of about 35k Euro's.
I think you make one mistake in your labor cost calculation: all the vastly overpaid managers reside in German factories. Doesn't reflect on factory workers. I know for sure that common workers in Germany don't earn 80EUR per hour.
They are not dying out because they lost the EV competition with China. They are dying because regardless of EV or ICE, they produce expensive vehicles for bad quality and poor reliability. The labours at these factories don't understand that their salaries are super inflated compared to the other countries. Today they are asking for a raise while the factories are going to close down.
I don't understand how free international trade could not help but eliminate industries in higher cost of living countries. Western countries don't manufacturer clothing anymore, this product is made in low cost countries. Why would automobiles be any different? One could help level the field by levying tariffs, but if you go overboard with these taxes, you initiate a trade war. The US has levied a 25% tariff on imported truck and SUVs for 60 years now, called the chicken tax. It seems to be a reasonable compromise. But 100%?! That is going to cause problems.
Not sure the fact that labour costs in China are cheaper than in Europe is much of a revelation. They are cheaper than Labour costs in Australia/Japan/USA too. It isn’t really a useful measure. The comparisons Sam makes with the cost of staff in other European countries is more useful
This may mean I cannot buy VW vehicle at their cost anymore. Union workers must compromise with the management as well as management accepts its cuts as well.
There are experienced, college educated programmers looking for jobs. Good luck to a factory worker finding a programming job after they “learn to code.”
Learning to code is overrated. Here in Netherlands l, the workforce needs more blue collar repair craftsman. Electrical, plumbing, construction. They are good paying jobs too. You're welcome.
I am afraid that the work of IT specialists and programmers will become unnecessary in 90 percent of cases. This is a fact. Artificial intelligence will lead to their dismissal. The professions of the future are: plumber, bricklayer, etc.
Humans shouldn't be doing this work. We'll need at least a form of UBI. But our Victorian midset (in the uk at least will baulk at that) so much more pain on the way .😢😢
The AI humanoid robots that take over all the manual production, transportation, and resource gathering jobs will put billions out of work. How are all theses people going to buy consumer goods with no income but UBI? Sorry but I think they will have to be outlawed. Bots only allowed to make humans more productive not replace them.
9:39 in - solution seems pretty simple to me - if German manufacturers want to survive (a little longer) then they should close ALL THEIR GERMAN FACTORIES.
Just refer to them as Deutsche Leyland so they can understand what's going to happen. I'm a doctor in South Africa, drove German and English cars for decades but since 2021, Chinese, we're extremely satisfied. The first time I saw a Chinese car get a five star safety rating I said the game is over.
Yes, learning to code is not practical for most factory workers. However, "learn to code" can be shorthand for looking to the future and finding another skill.
In a manufacturing environment cost is measured with a criteria that does not represent take home pay. It is a disservice to just give a figure without laying out all the components. In a factory you also talk direct/indirect jobs which may have very different pay scales. Example a job that does not require very specific requirements such as being a software engineer or mechanic working with the robots vs. someone just putting on tires. Add to that social costs, any health benefits, pension plans etc. I remember when the United Auto Workers Union in the US was striking against GM they were in that case also talking of costs over $120,000 per employee, all in, which is also very high. That is the reason s many companies move operations to less costly countries. Forgot to add that in a plant you also talk about work/hour so when you have 6 weeks vacation days and whatever days you have for sick leave, and how many hours are actually worked per day the hourly rate goes significantly higher and difficult to compare from one country to another.
@3:13 The valuation of *Big Auto* companies will shrink like balloons with their air let out, that's when they don't just burst. Hundreds of billions of dollars will just be wiped from the slate of the world's economy.
Tesla is the only car company that can use robotics to replace humans in US. Irs vertical integration makes ir much cheaper to make cars. Keeping limited models and upgrade options also help a lor
In the UK there are 11 million of us without work, so not suprising that we can't afford any new car, Chinese, German whatever, Ill keep my 20 year old Rover 75 which will see me out. The Germans have had it easy too long dominating the market in the UK and EU. Now its changing
@@Julian_Wang-paiHe means 11M that are not working, not are unemployed. However he’s implying that there are 11M that could be working, which there aren’t. As you say it’s 1.5M registered.
It’s all the EUs fault, here in Ireland we have an illegal VRT system, that’s a vehicle registration tax added to every car that comes into the country, new or used. The EU knows this is illegal in a one state system but fines the government €1 million, while the government makes close to €300 million in just this tax. It’s up to the EU to massively reduce the tax on vehicles and make them more affordable to ALL Europeans. Either way it’s going to be a tax loss.
Luxury and supercars are only profitable in Germany at this rate. I don't see BMW, Merc having similar issues. Audi is suffering due to low sales. Same is Porsche with low sales. VW as a maker of economy 'people's car' will be very hard to survive with high labor costs unless the volume is very very high.
Sam! Cost per hour is not salary per hour! This includes all costs like social security. Obviously in countries with no or minimal social security the cost is smaller.
China also has their version of social security and medicare. But it is less, because the cost of living is less. And thus their wages are less. So what you want to do is retire with your retirement income and take it to a low cost of living country and live better. That's what multiple thousands, perhaps millions of Westerners are already doing. But as for all you working stiffs, I feel bad. No easy solutions.
Tesla is working in a new, WAY more efficient factory, where many processes are automatized and the management system is very simple. This makes their labor costs way lower, to the point that they raised salaries recently without trouble or unions
You compete with high worker cost by massive automation so energy cost becomes more and more of a factor. Germany only has 5x the cost of electricity compared to the China/US. Well played…
VW sack 35,000 employees saves €5bn. 10% paycut on remaining employees saves €13bn . If employees getting €80 an hour for factory work thats about €140,000 a year. I think many workers will accept a 10% pay cut to save their jobs.
They are not getting payed 80e/h. There are a lot of cost on top of what is paid out; social, admin, etc. There are a lot of mix up between paid saluri and cost for the manufactor. Statistics can be twisted to show almost what you want.
Critisizing the pay of people is quite ridiculous. Cost of living is 20x higher than in China. So your logic makes 0 sense. Problem is not making the car costs, problem is paying hideous bonuses for the elites sitting on the board and CEOs. On top of wich the cars are not innovative and they cost 60k for an average Tiguan. If the costs per car is the issue then outsource everything to China for everything not only automotive and shut your yap when everybody is out of a job.
Salary costs may be higher in Germany than say China, but the cost of living in Germany is also much higher than in China, so the workers need to earn more. The cost per worker being quoted probably includes things like pension payments etc, some things which Chinese companies may not include in their figures where the social security laws & workers rights are, shall we say, somewhat weaker. I’m not sure I like the gleeful way the situation in Germany is presented here, keep in mind that these are many people lives that are at risk & in turmoil here.
VW and Porsche will stay. Like the rest of the brands in their group. The world is evolving and electric car bring a new challenge to car companies. The new challenge forces car manufacturers to re-organize. This applies to most other big car corporations not only VW Group. So stop the ranting. VW Group will stay at the top of their game.
That’s significant high pay for the work. No wonder the autos are so overpriced for the low tech. The whole auto group will be in serious trouble paying those wages then through in the union. Good bye.
@@slyowusu99 er face similar preficzmentMi in agriculture, in the so called garden land of europe? J thank God that our fellow citizens have not forsaken their hopes?kindly let me quote ein festes Berg ist unser Deutschland und wirklich unser Gott?haben wir vergoessen?
Crazy costs especially it seems in Germany. But here is one major problem with labour automation in the car industry if it happens in China. As it is such a big industry and if everybody loses their job to “Robots” then who the hell is going to buy their cars? As a huge amount of people won’t be able to afford it. Yes I agree that cars and certainly German and a few other European cars are stupidly expensive and my feeling is that some manufacturers have taken the piss during Covid and kept on doing so? Obviously it’s not that simple, but cars need to be cheaper so people can afford them, however workers need to be paid a reasonable wage for this to keep the cycle going. So increase Chinese tariffs to come in line with Europe and The US, but also decrease the cost of cars in the areas so people can afford them. 🤷🏻.
All of Germany is high cost, not just automotive. The outcome of this is obvious to anybody that has any sense. Both German management and the employees/Unions are ignoring reality.
Probably not in my lifetime but as tech improves, self drive etc, car ownership will be a thing of the past or at least a minority. We'll all have a universal wage to sit on our arses all day. 🤣
German cars and motorcycles today are bad. The old products were not that good but were honest products. I will not miss bmw audi VW at all and I think the customers will be better served with new companies making better products.. Time to change.. Thanks.
No point learning to code. AI will replace all coders / software engineers within 2 years. India will have a problem then too. Tech is changing the standard faster than we can comprehend.
i always have to laugh when i see comments like this because it exposes how little people know about what hey currently call AI. They do not realize what we call AI these days is highly dependent on human input. In other words if nobody ever coded it the AI doesn't know about it and will not come up with it on it's own since what we call AI these days are simple word prediction models. All the do is predict which word could possibly come after the previous word and that is it. There is absolutely nothing intelligent about these models.
AI isn't going to replace anything. AI is a parlor trick that's just good enough to fool greedy management into thinking it can do things that it really can't. The AI bubble will burst as everyone discovers just how crappy AI is at doing real tasks.
If your data of factory workers making €100000 a year is correct, then here is another case of unions with to much power, and will send their industry into extinction. the data i found on Germany is "Germany's average salary in 2024 is €54,000 annually, with higher wages in sectors like tech and finance. Part-time workers earn an average of €17.79 per hour, resulting in an estimated annual income of around €21,000. The minimum wage stands at €12.41 per hour." I'd say Germany's automotive industry is just 8-10 years behind Australia.
The situation arise from that rush into BEVs which turns out not to be the solution to excessive CO2 released in the air. But the real problem is a market clash between China and Europe-America. In China the car market is driven by the really rich people who can afford to buy a new BEV and throw it away after four years. They want a big vehicle with a lot of power to show that their show-off success, these are symbols of might. The West market is driven by middle-class people who want value for their money, good performance, good efficiency and capacity to sell back at a good price. These two markets are totally different in nature and the Chinese one is actually a bigger market. This is leading to the collapse of our West brands since our governments fell in the trap of the BEVs and did not analyse the impact on their own companies and market.
You are assuming that the cost of consumer goods is the only factor driving trade policy. Speaking for the US, we can no longer fund our primary geopolitical rival with a 2 trillion dollar a year trade deficit that is in turn driving a budget deficit and a national debt that costs us more in interest payments than we spend on national defense. It's unsustainable and unwise. Which means we reshore our production and raise tariffs. We raise our productivity with automation and innovation and leverage our advantages like cheap abundant energy and chip design.. We should not even try to compete with Chinese labor. Also, cars are more expensive than they need to be by design. Manufacturers need to build fewer luxury SUVs with high end trims and make more lower end cars that people can afford.
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My father was a cash register repairman in the 1960’s. He saw the handwriting on the wall when transistors started replacing mechanical parts. He moved the family to NCR headquarters in Dayton and was retrained as a coder. But he was virtually the only one; everyone else lost their jobs. The company shriveled to from a large conglomerate competing with IBM across product lines to a niche brand making ATMs.
@@donaldbucher472 we been sending iff and on?
With AI, everyone will be at the situation your father faced back then.
Where to move?
Your father was very smart , and it took a lot of courage to quit his job and relocate his family.
I can see a lot of Germans coping in the comments how net salary is much smaller actually, how rent and groceries are larger than in China, how German cars are better quality etc. IT DOES NOT MATTER!!! If there is no market, no buyers then it does not matter. One of the first thing I learned as an entrepreneur is don't create a product nobody wants to buy.
Now you not working with bare hands- mashines not people are making machines
Plenty of people want to buy German cars. Sounds like you're a horrible entrepreneur
Nobody is talking about FIRE (finance, insurance, real estate) sector eating everyone's lunch. And taxes. In Germany as in much of Europe, the state takes 50% of your gross income. And then from what's left you pay 30-50% for your apartment rent or credit. And let's not forget Germany's suicidal energy policies. This is what is destroying the Western industry. Most of the industries in Europe, especially those which consume a lot of energy will go the VW path. Bankruptcy. That's what happens when you have idiots and quislings in charge.
很多人买，就不会关厂了@@thewolf9851
@@thewolf9851 You are commenting under a video about Volkswagen's big problems with selling cars that are forcing it to close several factories in Germany. Just saying.
Did it to themselves VW went from the “people’s car” to cars for certain people.
Indeed. It's not enough to have it in the brand name! The actual product needs to realize the idea too.
This is where British Leyland / Austin Rover / Morris / etc were in the 1970s and 80s. There is nothing left of them today.
7:25 "Labor cost in Germany are 79 E/hr, that's like getting PAID 150 $/hr in Australia". Not exactly PAID 150/hr. Keep in mind, labor cost include all the benefits like insurance, pension etcetera. Workers are not getting 79/hr in their pay check, the TOTAL labor cost includes the wage plus everything else. Love your channel, sir keep up the great work!
😂😂😂😂
They will go to get 0,00, looks like there is zero hope for any industry inside Germany
exactly, "cost" and "hourly pay" is not the same thing.
I live in Germany and in my region (South West) there are a huge number of car manufacture suppliers. I work in one of the many. I can say at least for the suppliers the average wage of a production worker is 20€. That is a normal wage here and one has even to keep an eye on one's spending with that wage. Most of us are facing now (many already) short term work and if the situation prolongs which I think it will, then lay offs. A lot of people here are getting increasingly nervous. I personally see the situation in this country as hopelessly doomed. And I'm trying to be optimistic.
Bordering with Luxembourg?
Then why are they saying factory workers make 130k a year?
@@johndoe-bl8yd that's a lie. As far as I have heard, workers in VW, Mercedes, and Co. earn more than us but its around 30€ an hour. That's good but still a far cry from 130k a year.
Hope and pray thSt this ill wind which blows good to none is getting over very soon giving deay to better breeze, that is more wholesome?
@@johndoe-bl8yd They didn't say that. They are saying factory workers cost the company 130K a year. A worker cost a lot more than their salary, you got recruiting cost, pension cost, training cost, benefit cost, legal cost, etc...
Labour costs at the factory where cars are put together only accounts for about 5%. It'll affect the price by a couple 1000 for sure. But bad management is the real reason they will be going under, not labour costs.
Bad innovation management. This is a textbook example of innovators taking over the industry
Hello - podcaster data from Germany saying is $7000 per car for those in Germany. Your figure of 1000. - where data from and what country?
🇩🇪 for decades have been making mediocre cars and sold at a hefty premium because of the myth of superior engineering and quality. Like 🇯🇵 they have had it too good for too long. About time 👎
You sir, are right on. Overrated, overpriced cars
Having lived in Germany and worked in the auto industry there, in previous downturns, the industry would kick and scream but eventually make the necessary changes to make the cars more competitive with Asian brands. Adding Air conditioning, cup holders or electric windows as standard, for example. Fairly easy stuff although it always took a crisis for something to happen. Labour strikes would largely be avoided by increasing wages and/or cutting hours, keeping the workforce intact (hardly ever any layoffs). Now, there are fundamental changes in vehicle manufacturing and German companies were asleep at the wheel. I'm not sure they can catch up this time.
As you said, 7000 per vehicle in Germany vs China less than 2000, in worst case scenario that is 5500 more cost per vehicle. Still there is no explanation why same car in Europe is 20000 more costly than in China (taking here about VW vehicles, not imported ones).
At the end they will close all factorys.
The new Idea is car sharing.
That $125k/year reminds of crazy stat from 1990s: costs more to jail people in US than send to Harvard.
(Why Repubs wanna privatize &... capitalize).
It is expensive to put a person into captivity. Why would it be cheaper to go to classes at a school?
@CombatSport777 Not a "a school", *Harvard.* In US - with more people jailed than any other nation - "expensive" is about to = (more) *PROFITABLE* 🤑.
VW gave billions in dividends to the owners, instead of upgrading production lines. The cost isn't labor cost alone. I understand the workers. They should confiscate the factories and focus on production instead of profit maximization
Those dividents wouldn't have made a differnce in the grand scheme of things
@hendrx you have to start somewhere. If that would be the reasoning we would not be as advanced species we currently are.
Why upgrade production lines if you still have to pay the workers you don't need any more? Maybe confiscating the factories can at least get you put in a nice prison where the meals and accommodations are free.
Capitalism... 😂
Lol, Chairman Mao reborn. :D
Oh my goodness , it needs to take decisive action to survive and while no one can agree the ship is busy sinking 🤦🏻♂️
Before the ship sinks, it is still necessary to divide the money.
The cars are totally unaffordable for anyone in their prime so who cares about buying a porsche now?
Not surprised tesla don't want anything to do with any union
Yeah but that's not because tesla offers its workers enough job loyalty protection... Musk is just evil. Billionaires don't like normal workers - they just use them and throw them away. Workers do need protections from fiends like that - union or not.
No need to fight ...all will be close. Just matter of time.
Dream about that
No they won't 😂
Minimum salary in Portugal: 870€ GErmany: € 1.985,60
The car industry is heavily robotized, so the main cost is not the workers but the material (supply channels), infrastructure and electricity.
It's not even that high in The Netherlands. And we have a fairly good economy. Our minimum wage is around 1200 euro. It is also aged based, so the older you are the higher your minimum wage. It scales by law, but Germany seems like an outlier
And why is it so high? Renting prices are going through the roof and taxes are insane. Except for rich people who pay way less taxes. Sounds familiar, right? Germany needs a lot of restructuring… but no one wants to change anything. And so we keep the system running as is until it crashes.
You need people to have money to generate growth.
It's an age old dilemma and looks like ECB with too tight monetary policy is the root cause.
I don't think Germany has a minimum salary by law. That kind of abomination is more common in southern European countries.
Its was only working because most of the costs of a car production its done by suppliers with average salarys, not with 80-130k€
sounds like everyone in the German auto industry can take a %15 haircut and not miss a beat (especially after taxes) ,and yet here they are bickering . but, if blame was to be shared, I give 70% to management (and the shareholders). They are the ones who are supposed to see this coming and plan for it. They got rid of people who tried to warn them
That's just the point, management often DOES see the problems but are powerless to make any changes for fear of being replaced.
What does a German CEO make compared to a Chinese CEO?
The decisive factor is not the wage costs. Here in Switzerland, wage costs are twice as high as in Germany. Nevertheless, Switzerland is competitive. At the end of the day, productivity counts.
Whoever closes, please open in Thailand, the Thai car market still has some places for affordable "real European brand" cars/EVs, for people that want to avoiding Chinese EVs.
Stay on Strike, ain’t paying a cent over $€£30,000 for a High Performance EV. New World or None, 0 f’s given for Entitlement.
The German assembly workers can make a fresh start moving to Chinese cities and becoming seasonal hand car wash specialists in reparation for doing business for decades with the Chi-Coms.😂😂
You don't have to compete on price. That's only a race to the bottom.
but you do have to compete on value for money.
We work at a sanding company and deliver Auto parts to these companies perfect for painting, and our company pays us 14 to18 euros per hour.... We talking about different Germany or what!!!
And if your boss wanted to fire you, how much they have to pay the lawyers? You cost your company a lot more than your salary.
@wgemini4422 with this salary every boss is happy lol, and he never fire anyone...what you talking about
@@ioannisdousmanis4025 I am talking about labor cost is a lot higher than your salary.
15 euros per hour is about the lower bound of an "okay for a normal life" wage...
argueing? both have same Ceo‘s
Wage costs are not the important measure. Productivity is the important measure. If someone costs twice as much as someone else but is 3 times as productive, then the more expensive employee is actually cheaper in terms of efficiency.
Facts.
Sure but where’s the productivity?
Assuming that the lower cost of workers are not as productive as higher cost of workers.
The 'Gernan Engineering' myth is over, they have to face the consequence of high labor cost, dated technology, lack of factory investment, bad management, etc.
The real problems are high energy costs due to the stupidity of closing nuclear power down and the loss of cheap gas from Russia together with lack of demand for electric cars they are committed to produce. All self-inflicted issues resulting from left wing government policies.
Germany is a country or old entitled people. Young don't wanna work since taking social support pays more than working. Really. If you have wife and 3 kids it's BETTER not to work.
Slander Bot 😅
Reminds me of the dying days of the british car industry in the 70s.
Except the German industry will come back stronger than ever
Time will tell😊@@thewolf9851
@thewolf9851 I assume the British thought that also.
@@thewolf9851There are multiple Big Markets now. China, Mexico , Vietnam, thailand, India are all low cost markets that have capability to develop their own cars.
Sam, an important thought about cost is not just the labor cost per hour but the labor hours per car. As Tesla is demonstrating with the Mega-cast idea, instead of 70 parts in the rear end make it 1. This should help in crash repair cost too, in the long run. How about the Bots that will be doing more of the human functions?
Bless you m8 for just spitting facts. My thoughts are with you and your family 😊
😂😂😂😂😂😂😂
I’m all in favor of auto workers making high wages, executive management need to drastically reduce their wages. People praise the low wages of Chinese workers, while they struggle to survive while their executives make hundreds of millions and live like kings. We need more equal wages.
In Germany the cost for employers are much higher per employee, this is called Lohnnebenkosten.
The average worker gets (before taxes) Most likely less than 40 Euros per hour.
The 1xx Euro per hour seems like Accounting shenanigans.
Exactly this, cost of labor is cheap in China and high in Germany. This isn't surprising at all. It's like comparing cost of labor in California vs Mexico
@@xen.7140
As far as I know, the labor cost in India is much lower than that in China.
But I don't see the goods made in India selling all over the world.
VW's factory in China employs the same Chinese workers (not German workers), but their sales are declining.
No, it is management and bureaucracy overhead.
@@jogana6909 India is a completely different story. India has it's own developed business process offsourcing industries like call centres that companies frequently use due to very low cost of labor. Even large companies like PayPal have most of their customer service in India. You wouldn't build call centres in Germany where the average pre-tax salary is 3000 euro.
VW's sales would be declining even if 100% of their factories were in China. In fact, they just recently sold a factory in China. The issue is much larger than that and has to do with unprofitability of their factories. As referenced in the video, it costs VW a lot more to build a car than other manufacturers (about 3 times as much on average). VW employees are more costly than even Porsche and Audi on average, and there's over 100,000 of them. This was not an issue while car sales were at an all-time high a few years ago. The decrease in sales is also largely due to high leasing rates at the moment, car sales are significantly lower than they were in many years and at the same time VW is suffering losses in billions + having to outcompete Chinese manufacturers who are arguably operating at a loss.
I wouldn’t want to drive any of their cars. The 2 VW’s I did own, the plastic in them cars deteriorated at 8 years old. The cars are crap. This morning I’m driving my kids to school and can’t wait to get in the Tesla…
one cannot underestimate the double whammy of EV mandates and tax breaks for EVs. Governments are literally ramming EVs down our throats. The question is why?
Great opportunity to bring in the robots.
In addition to this they have a 35-hour-work-week at VW, Audi and BMW.
I find those German salaries unreal! I grew up in a GM town in the UK, so most everyone I knew worked for Vauxhall at one time or another. The few people I know who still work on the shop floor there make the equivalent of about 35k Euro's.
I think you make one mistake in your labor cost calculation: all the vastly overpaid managers reside in German factories. Doesn't reflect on factory workers. I know for sure that common workers in Germany don't earn 80EUR per hour.
Sigh, it's amazing how few people understand the labor cost is more than salary.
They are not dying out because they lost the EV competition with China. They are dying because regardless of EV or ICE, they produce expensive vehicles for bad quality and poor reliability. The labours at these factories don't understand that their salaries are super inflated compared to the other countries. Today they are asking for a raise while the factories are going to close down.
I don't understand how free international trade could not help but eliminate industries in higher cost of living countries. Western countries don't manufacturer clothing anymore, this product is made in low cost countries. Why would automobiles be any different? One could help level the field by levying tariffs, but if you go overboard with these taxes, you initiate a trade war. The US has levied a 25% tariff on imported truck and SUVs for 60 years now, called the chicken tax. It seems to be a reasonable compromise. But 100%?! That is going to cause problems.
Not sure the fact that labour costs in China are cheaper than in Europe is much of a revelation. They are cheaper than Labour costs in Australia/Japan/USA too. It isn’t really a useful measure. The comparisons Sam makes with the cost of staff in other European countries is more useful
This may mean I cannot buy VW vehicle at their cost anymore. Union workers must compromise with the management as well as management accepts its cuts as well.
The living costs in west Europe (I'm Danish)are very very high and so are the taxation.
Not as high as in the US (rent and healthcare) and the taxation is not that much higher
There are experienced, college educated programmers looking for jobs. Good luck to a factory worker finding a programming job after they “learn to code.”
Learning to code is overrated. Here in Netherlands l, the workforce needs more blue collar repair craftsman. Electrical, plumbing, construction. They are good paying jobs too. You're welcome.
I am afraid that the work of IT specialists and programmers will become unnecessary in 90 percent of cases. This is a fact. Artificial intelligence will lead to their dismissal. The professions of the future are: plumber, bricklayer, etc.
Why would a factory worker want a programming job?
@@thewolf9851 To survive financially and materially after he loses his factory job.
They can always send a few more billions to Ukraine
They better. Russia is coming east again. Baltics and Poland is next. Better to build ammo factories than EV factories now.
@@tyharris9994 yeah its working great for them so far
@@tyharris9994BS fear mongering
@@tyharris9994 LOL. Russia has zero interest in Poland as long as they stay behind the border that Stalin set for them. That got solved in 1945.
Very well stated 👏
In the end globalization leads to equalization of living standards. It can be a painful process.
Humans shouldn't be doing this work. We'll need at least a form of UBI. But our Victorian midset (in the uk at least will baulk at that) so much more pain on the way .😢😢
The AI humanoid robots that take over all the manual production, transportation, and resource gathering jobs will put billions out of work. How are all theses people going to buy consumer goods with no income but UBI? Sorry but I think they will have to be outlawed. Bots only allowed to make humans more productive not replace them.
Depends how expensive your product is and 7k€ matters or not as a production price for a car.
9:39 in - solution seems pretty simple to me - if German manufacturers want to survive (a little longer) then they should close ALL THEIR GERMAN FACTORIES.
They paid dividends this year, so they have enough money for salaries.
Just refer to them as Deutsche Leyland so they can understand what's going to happen. I'm a doctor in South Africa, drove German and English cars for decades but since 2021, Chinese, we're extremely satisfied. The first time I saw a Chinese car get a five star safety rating I said the game is over.
Electric V, when you said "learn to code" as part of retraining, that's not practical for most people
Yes, learning to code is not practical for most factory workers. However, "learn to code" can be shorthand for looking to the future and finding another skill.
In a manufacturing environment cost is measured with a criteria that does not represent take home pay. It is a disservice to just give a figure without laying out all the components. In a factory you also talk direct/indirect jobs which may have very different pay scales. Example a job that does not require very specific requirements such as being a software engineer or mechanic working with the robots vs. someone just putting on tires. Add to that social costs, any health benefits, pension plans etc. I remember when the United Auto Workers Union in the US was striking against GM they were in that case also talking of costs over $120,000 per employee, all in, which is also very high. That is the reason s many companies move operations to less costly countries.
Forgot to add that in a plant you also talk about work/hour so when you have 6 weeks vacation days and whatever days you have for sick leave, and how many hours are actually worked per day the hourly rate goes significantly higher and difficult to compare from one country to another.
Great points/
In the meantime dividends of €5 billion are being sucked out of the company every year.
R. I. P. VW....
What is most staggering is also the cost to develop car and implement new models in China is like 80% cheaper
Was that the albino monk from DaVinci Code in that stock factory footage (2:38)?
Deals need to be done between Management and Unions.
Thank you.
@3:13 The valuation of *Big Auto* companies will shrink like balloons with their air let out, that's when they don't just burst.
Hundreds of billions of dollars will just be wiped from the slate of the world's economy.
Workes could work on new Tesla fabrics in Germany
Tesla is the only car company that can use robotics to replace humans in US. Irs vertical integration makes ir much cheaper to make cars. Keeping limited models and upgrade options also help a lor
Overpriced cars, even the entry level car needs to cost 50% less if the want to complete
I looked it up a few days ago: Smallest VW 20k, and the smallest BYD 15k (with some temporary rebate, I think). Not 50%.
So, the proposed 10% pay reduction should've been 50%? 😥
In the UK there are 11 million of us without work, so not suprising that we can't afford any new car, Chinese, German whatever, Ill keep my 20 year old Rover 75 which will see me out. The Germans have had it easy too long dominating the market in the UK and EU. Now its changing
Errr - 1.5million registered unemployed in the UK. Maybe about 10 million leisure class without work..?
@@Julian_Wang-paiHe means 11M that are not working, not are unemployed. However he’s implying that there are 11M that could be working, which there aren’t. As you say it’s 1.5M registered.
I think the EV mandate has destroyed the auto industry in the US and Europe.
It’s all the EUs fault, here in Ireland we have an illegal VRT system, that’s a vehicle registration tax added to every car that comes into the country, new or used. The EU knows this is illegal in a one state system but fines the government €1 million, while the government makes close to €300 million in just this tax. It’s up to the EU to massively reduce the tax on vehicles and make them more affordable to ALL Europeans. Either way it’s going to be a tax loss.
The workers should put their politicians in jail instead of going on strike. Another stupid action.
Luxury and supercars are only profitable in Germany at this rate. I don't see BMW, Merc having similar issues. Audi is suffering due to low sales. Same is Porsche with low sales. VW as a maker of economy 'people's car' will be very hard to survive with high labor costs unless the volume is very very high.
Sam! Cost per hour is not salary per hour! This includes all costs like social security. Obviously in countries with no or minimal social security the cost is smaller.
China also has their version of social security and medicare. But it is less, because the cost of living is less. And thus their wages are less. So what you want to do is retire with your retirement income and take it to a low cost of living country and live better. That's what multiple thousands, perhaps millions of Westerners are already doing. But as for all you working stiffs, I feel bad. No easy solutions.
How do these labor cost compare with what Tesla spends for labor costs in Germany?
Tesla is working in a new, WAY more efficient factory, where many processes are automatized and the management system is very simple.
This makes their labor costs way lower, to the point that they raised salaries recently without trouble or unions
de industrialisation at work
You compete with high worker cost by massive automation so energy cost becomes more and more of a factor. Germany only has 5x the cost of electricity compared to the China/US. Well played…
Tariffs, tariffs and more tariffs... it probably won't help, but that's what Europe will do
VW sack 35,000 employees saves €5bn. 10% paycut on remaining employees saves €13bn . If employees getting €80 an hour for factory work thats about €140,000 a year. I think many workers will accept a 10% pay cut to save their jobs.
None did.
Not at VW they rather be out of a job then go down 10% and keep a job for whatever weird reason.
They rather have nothing to eat than 10% less to eat.
They are not getting payed 80e/h. There are a lot of cost on top of what is paid out; social, admin, etc.
There are a lot of mix up between paid saluri and cost for the manufactor.
Statistics can be twisted to show almost what you want.
Personnel costs and energy costs. Energy costs due to government policy on Russian gas. It's all self-inflicted my Germany
Critisizing the pay of people is quite ridiculous. Cost of living is 20x higher than in China. So your logic makes 0 sense.
Problem is not making the car costs, problem is paying hideous bonuses for the elites sitting on the board and CEOs. On top of wich the cars are not innovative and they cost 60k for an average Tiguan. If the costs per car is the issue then outsource everything to China for everything not only automotive and shut your yap when everybody is out of a job.
Salary costs may be higher in Germany than say China, but the cost of living in Germany is also much higher than in China, so the workers need to earn more. The cost per worker being quoted probably includes things like pension payments etc, some things which Chinese companies may not include in their figures where the social security laws & workers rights are, shall we say, somewhat weaker.
I’m not sure I like the gleeful way the situation in Germany is presented here, keep in mind that these are many people lives that are at risk & in turmoil here.
VW and Porsche will stay. Like the rest of the brands in their group. The world is evolving and electric car bring a new challenge to car companies. The new challenge forces car manufacturers to re-organize. This applies to most other big car corporations not only VW Group. So stop the ranting. VW Group will stay at the top of their game.
I no longer desire any German cars for the last 5 years. They have become bland and boring, not forgetting unreliable now.
Porsche, the "e" at the end is not silent you have to say as you say "electric".
At least people in Germany dont live in poverty, and they still have all their human rights.
That’s significant high pay for the work. No wonder the autos are so overpriced for the low tech. The whole auto group will be in serious trouble paying those wages then through in the union. Good bye.
God bless this Viking. The EV detail, the persistence, the ….. no-nonsense foul language. Love the boy. 👍🏾👍🏾
@@slyowusu99 er face similar preficzmentMi in agriculture, in the so called garden land of europe?
J thank God that our fellow citizens have not forsaken their hopes?kindly let me quote ein festes Berg ist unser Deutschland und wirklich unser Gott?haben wir vergoessen?
Crazy costs especially it seems in Germany. But here is one major problem with labour automation in the car industry if it happens in China. As it is such a big industry and if everybody loses their job to “Robots” then who the hell is going to buy their cars? As a huge amount of people won’t be able to afford it. Yes I agree that cars and certainly German and a few other European cars are stupidly expensive and my feeling is that some manufacturers have taken the piss during Covid and kept on doing so?
Obviously it’s not that simple, but cars need to be cheaper so people can afford them, however workers need to be paid a reasonable wage for this to keep the cycle going.
So increase Chinese tariffs to come in line with Europe and The US, but also decrease the cost of cars in the areas so people can afford them. 🤷🏻.
All of Germany is high cost, not just automotive. The outcome of this is obvious to anybody that has any sense. Both German management and the employees/Unions are ignoring reality.
That works if they are also high productivity, but they are not compared to many global brands now.
Probably not in my lifetime but as tech improves, self drive etc, car ownership will be a thing of the past or at least a minority. We'll all have a universal wage to sit on our arses all day. 🤣
German cars and motorcycles today are bad. The old products were not that good but were honest products.
I will not miss bmw audi VW at all and I think the customers will be better served with new companies making better products..
Time to change..
Thanks.
No point learning to code. AI will replace all coders / software engineers within 2 years. India will have a problem then too. Tech is changing the standard faster than we can comprehend.
i always have to laugh when i see comments like this because it exposes how little people know about what hey currently call AI.
They do not realize what we call AI these days is highly dependent on human input.
In other words if nobody ever coded it the AI doesn't know about it and will not come up with it on it's own since what we call AI these days are simple word prediction models.
All the do is predict which word could possibly come after the previous word and that is it.
There is absolutely nothing intelligent about these models.
AI isn't going to replace anything. AI is a parlor trick that's just good enough to fool greedy management into thinking it can do things that it really can't. The AI bubble will burst as everyone discovers just how crappy AI is at doing real tasks.
If your data of factory workers making €100000 a year is correct, then here is another case of unions with to much power, and will send their industry into extinction. the data i found on Germany is "Germany's average salary in 2024 is €54,000 annually, with higher wages in sectors like tech and finance. Part-time workers earn an average of €17.79 per hour, resulting in an estimated annual income of around €21,000. The minimum wage stands at €12.41 per hour." I'd say Germany's automotive industry is just 8-10 years behind Australia.
The situation arise from that rush into BEVs which turns out not to be the solution to excessive CO2 released in the air. But the real problem is a market clash between China and Europe-America. In China the car market is driven by the really rich people who can afford to buy a new BEV and throw it away after four years. They want a big vehicle with a lot of power to show that their show-off success, these are symbols of might. The West market is driven by middle-class people who want value for their money, good performance, good efficiency and capacity to sell back at a good price. These two markets are totally different in nature and the Chinese one is actually a bigger market. This is leading to the collapse of our West brands since our governments fell in the trap of the BEVs and did not analyse the impact on their own companies and market.
You are assuming that the cost of consumer goods is the only factor driving trade policy. Speaking for the US, we can no longer fund our primary geopolitical rival with a 2 trillion dollar a year trade deficit that is in turn driving a budget deficit and a national debt that costs us more in interest payments than we spend on national defense. It's unsustainable and unwise. Which means we reshore our production and raise tariffs. We raise our productivity with automation and innovation and leverage our advantages like cheap abundant energy and chip design.. We should not even try to compete with Chinese labor. Also, cars are more expensive than they need to be by design. Manufacturers need to build fewer luxury SUVs with high end trims and make more lower end cars that people can afford.
Sell excess factories to Tesla.
Why tho😂, converting them to ev is more expensive than building a new one
What are you talking about is globalization and labor markets loosing their exclusivity
Just waiting for the fire sale on vw and Porsche vehicles before they go bankrupt.
The big fear is the tax payer will be forced to rescue the brand and re finance it. Too big to fail....
What about the VW corporate pot; isn't that part of the calculation? Why do all the tax giveaways go to the rich & super-rich?