The German automotive industry is undergoing a comprehensive transformation that poses major challenges for companies, affected regions, and employees. The ongoing digitization of products and production—but above all, climate protection requirements—are driving profound structural change. One thing is clear: the automotive industry will rise to the emerging challenge. In the next five years alone, it will invest over 150 billion euros in this transformation.
However, it is also clear that the structural change resulting from the ongoing mobility transition poses significant risks to employment in the automotive industry—because new technologies and products are simultaneously altering production structures and processes, as well as skill requirements, in some cases fundamentally. Furthermore, electrification in the mobility sector could lead to significant job losses.
Policymakers must actively support this structural transformation—especially for small and medium-sized enterprises and second- and third-tier suppliers in the value chain, which today still frequently rely on internal combustion engines.
Recommendations of the Expert Committee
At the urging of IG Metall, policymakers have therefore established an “Automotive Future Fund” with a total volume of one billion euros. The report containing the expert committee’s recommendations was recently presented to and handed over to Chancellor Angela Merkel during a meeting of the “Concerted Action on Mobility” (KAM). In addition to IG Metall, KAM includes members of the coalition, state premiers from selected federal states, as well as representatives of the automotive industry and the National Platform for the Future of Mobility (NPM).
“The Concerted Action on Mobility can take stock of its progress so far with a sense of success. Implementation of the measures agreed upon in the economic stimulus package and by the KAM has begun; we now need to really pick up the pace here,” says Jörg Hofmann, First Chairman of IG Metall. “However, continuing shortcomings are also evident, such as the sluggish expansion of the charging infrastructure. The new European climate targets also pose an additional challenge. Therefore, the KAM’s work here and now is far from over. The final report on the Automotive Future Fund presented today by the expert commission contains important proposals. Among them—at the urging of IG Metall—is support for regional transformation networks. From the employees’ perspective, it is in the regions that the success of the transformation—or whether it leads to job and prosperity losses—will be decided. Effective regional industrial and structural policies are therefore needed. The concept of regional transformation networks within the framework of the Automotive Future Fund must now be implemented quickly and sustainably. The first regions are ready—including Saarland, South Westphalia, and Southeast Lower Saxony—with others to follow.”
Comprehensive Funding Package Developed
The funding recommendations developed by the Future Fund comprise three pillars: The first pillar focuses on consistent “digitalization in the automotive industry.” This package includes, among other things, funding for semiconductor architectures, AI-based components, digital twins, and operating systems. The second pillar lists funding initiatives aimed at sustainably “strengthening the value chains of future mobility.” Here, for example, support will be provided for a production research network focused on innovative industrial production methods in the fuel cell value chain, as well as processes and facilities for circular production. The third pillar of the Future Fund involves supporting regional innovation and transformation clusters.
Strengthening Innovation and Transformation Clusters
The regional transformation networks implement a key demand of IG Metall: The shape of the transformation in the German automotive and supplier industries is determined at the regional level. The tools available to date are insufficient for this purpose. Tailored regional policy instruments are needed to ensure that the transformation succeeds in the regions most affected. This is where the current funding announcement comes into play.
Together with relevant local stakeholders, the regional transformation networks develop transformation strategies for their respective regions and coordinate their implementation by combining sector-specific expertise with knowledge of the regional economy. The program aims to strategically develop regions that are currently heavily dependent on vehicle manufacturing. The goal is to support regional transformation processes in order to maintain and strengthen a region’s economic performance and adaptability in the long term. The ultimate objective is a sustainable economic structure.
Networking and Capacity Building
The regional transformation networks can provide information, design studies on regional economic structures and regional development prospects, facilitate networking, and build capacity. Public or non-profit organizations such as universities, labor unions, or associations may submit funding applications. Existing structures, initiatives, and clusters should be utilized and integrated to the extent permitted by funding regulations. In total, the federal government is providing up to 200 million euros for the regional transformation networks.
