00:00After the news that Europe's largest car producer, VW, may close two plants, experts are sounding
00:06the alarm that a downsizing of manufacturing isn't just limited to the car industry.
00:11The German Institute for Economic Research, DOW, says companies need to evolve.
00:17Germany is very export-dependent. Germany is very industry-dependent. And like Volkswagen,
00:23many other companies have missed out on the transformation. And for Volkswagen that means
00:28specifically they have not managed to make the transition to electric cars. They're falling
00:35behind. They have had very high profits in the past, very successful, and now they're
00:40suffering from a hangover, if you wish. And this is not just the automotive sector, it's
00:47machinery, it's the pharmaceutical, the chemical sector. This is quite a problem many have.
00:53The largest chemical producer in the world, who has its headquarters in Germany, BASF,
00:57is also looking at relocating some of its workforce to Asia and laying off workers
01:02in Germany amid exploding energy prices due to the full-scale invasion in Ukraine and
01:07burdensome bureaucracy in Germany.
01:10Germany's biggest problem is not short-term. It's structural. It's long-term. So we expect
01:17in our forecast a stagnation, maybe for another year, and then a gradual recovery. So it will
01:22take some time, and that's frustrating for companies, for the government to hear, but
01:28that's part of the truth. It will require some resilience and continued investment for
01:34the next five years, and then hopefully over that period Germany, or the German economy,
01:39will manage the transition.
01:42Europe's strongest economy is still grappling with leaving its recession behind.
01:48As EU car companies struggle with the phasing out of combustion engines and a transition
01:54to electric vehicles before 2035, experts are predicting that thousands more jobs may
02:00be cut across different sectors over the next couple of years. With the German economy largely
02:07dependent on the car industry, these mass layoffs may lead to an increase in disillusionment
02:14and play into the hands of the far right. This could have a major impact on next year's
02:21federal elections. Liv Stroud, in Berlin, for Euronews.
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