crown jewel of German economy is dying.
European Economics Thread
- Thread starter PiSigma
- Start date
crown jewel of German economy is dying.
Interesting enough no one talks about the coming collapse of Europe despite the ample economic cues for the past two years.
This is structural. They lost not only the energy (gas, coal, oil) and raw materials from Russia. They also lost the Russian market. This is how China surpassed Germany in automobile exports for example. It is a double wammy.
Germany will de-industrialize. All heavy industry will move out. Instead of making steel it will be imported. Then they will start importing whole parts. In the end what factories remain will be screwdriver assembly. You will have design offices, marketing and sales offices, and you will have screwdriver assembly.
And industries left will need to be low energy. You do not need to look far to see their future. Just look at Japan.
Germany will de-industrialize. All heavy industry will move out. Instead of making steel it will be imported. Then they will start importing whole parts. In the end what factories remain will be screwdriver assembly. You will have design offices, marketing and sales offices, and you will have screwdriver assembly.
And industries left will need to be low energy. You do not need to look far to see their future. Just look at Japan.
I don't normally feel too bad for the German government, but maybe a little bit in this case. Pulled a bunch of strings to give Intel subsidies and whatever. Now, Intel is looking like they will pull out.
That German Intel fab will go nowhere. This would be in East Germany. Intel right now is extremely tight with cash and won't be able to build a fab there. Priority will be given to fab projects nearer completion. They goofed up and misjudged consumer demand for chips after the lockdowns ended. A lot of people got a computer during the lockdowns and it is unlikely they will upgrade soon. Despite huge promised financial aid by the German government and the EU to build this fab it is unlikely it will happen.
what about Civil aviation manufacturing ?? despite being de-industrialize Germany particular Europe still have crown jewel Civil aviation/Turbofan high tech industries.. this is theirs backbone.
I think the biggest problem for Europe is that we don't dream big anymore. Looking back at the 1990s and 2000s, there was still this spirit of grandiosity. Eurotunel, Oresund bridge, building a 60 km railway tunnel under the Alps, a European space program. Now it's all cuts, reductions and downsizings everywhere you look. The only "big thing" the collective Europe could come up with over the past decade was to shut down the nuclear power plants and put up some wind turbines instead... Something like the A380, or Bugatti Veyron, or the Milau bridge would never be greenlit today, everyone would be crying megalomania from the rooftops. We dreamt small, and that's what we became.
And even those wind turbines are imported from China…
There are two big aero engine manufacturers in Europe. The UK (Rolls-Royce) and France (Safran). The others are minor players.
The UK is no longer part of the EU. As for France their large aero engines for commercial aircraft are made together with US company GE. Unlike Rolls-Royce they cannot make a whole engine by themselves.
What France is big though is in helicopter engines. Eurocopter is a huge helicopter manufacturer and they typically use engines made by Turbomeca which is part of Safran.
Airbus is basically a joint venture of several EU countries. The major ones are France and Germany. That is why the Airbus main sites are in Toulouse, France and Frankfurt, Germany. The Airbus leadership has wanted to focus production solely on Toulouse more than once, but due to political reasons to get EU government funding the Frankfurt site is still used.
Europe still has several large players in the wind turbine space. Vestas (Denmark) #3, Siemens Gamesa Renewable Energy (Spain) #6, Nordex (Germany) #9, Enercon (Germany) #14, etc. It is just that the Chinese market for wind turbines is much larger.
As you can see the Chinese companies mostly sell to the Chinese market. While the European companies mostly sell to Europe and the US. It is not cost competitive to transport large wind turbines, especially the mast and blades, it is cheaper to bring the materials and make them close to the install site. In some place near a port facility.
But quite likely all those wind turbines use rare earth magnets made in China for the generators.