German Auto Industry Faces Obstacles Concerning Emissions, Steel
Hannah Matangos
Hannah Matangos was a research intern at AICGS for the spring semester of 2016.
The German automobile industry has been facing significant obstacles since last September, when Volkswagen (VW) admitted to cheating on U.S. admissions tests by installing software that would deceive regulators in up to 11 million diesel vehicles around the world, causing VW’s market value to drop by billions of euros and the firing of its long-time CEO. In the aftermath of this scandal, German transport minister Alexander Dobrindt has stated that the German federal government wants to conduct unannounced emissions tests on all carmakers in order to rebuild the reputation of the auto industry. A draft proposal for the random testing policy was presented on 18 February and also calls for government promotion of switching to electric vehicles.
However, the VW scandal is not the last. The U.S. law firm Hagens Berman is now suing Daimler for violations of U.S. emissions laws. Allegedly, Daimler’s Mercedes BlueTech vehicles emit nitrogen oxide (NOx) at levels 65 times higher than those permitted. Additionally, on-road testing also shown that Mercedes Clean Diesel cars emitted NOx at levels 19 times higher than the U.S. standard.
Mercedes markets both of these models as supremely eco-friendly, leading Hagens Berman’s claims that the manufacturer is engaging in false advertising. Daimler said the lawsuit was “unfounded,” and that they would review the test results to prepare a defense. Hagens Berman is calling for reparations to those who purchased BlueTech vehicles, including restitution and the establishment of a recall or free replacement program.e
These challenges to the German automobile industry occur alongside losses in the European steel industry due to Chinese products being sold below production cost on the European market. On Monday, over 5,000 workers and managers from steel and other sectors from seventeen European countries gathered in Brussels to protest, calling for EU action against China. Eurofer, Europe’s main steel association, had previously urged the EU Commission to crack down on these cheap Chinese products, which have caused the market to struggle with low prices for raw materials and finished steel products.
Last week the European Commission imposed import duties on cold-rolled flat steel from China and Russia, but steel industry groups say that this is not enough to save the industry. According to Eurofer President Geert Van Poelvoorde, since the financial crisis, over 85,000 jobs have been lost in the European steel industry, with 7,000 jobs having been lost in the past six months.
The steel industry is vital in Europe since it supplies the continent’s mass car sector, engineering firms, telecom companies, and other manufacturers. Germany is Europe’s biggest steel producer, and German industrial group ThyssenKrupp has been negatively affected by Chinese dumping, experiencing net losses in the first quarter.
