News in the economic war: threat of production relocation, China wants the port of Hamburg and danger of a beer revolution in Bavaria
The economic war and the mutual sanctions are having an impact, and not just on Russia. After the traffic light coalition, initiated by Habeck, decided on a levy and relief package that should protect energy and above all gas suppliers so that they do not go bankrupt and the energy supply in Germany as a whole does not collapse like to save system relevant the banks during the financial crisis, but the burdens were passed on to consumers, even though they should be compensated with payments, the criticism from the opposition is loud that this is social indifference, especially since Habeck does not agree to an extension of the service life of nuclear power plants, but has proposed a technically questionable reserve modus, which many see as ideological obduracy , as well as the shutdown of the Emsland nuclear power plant in Lower Saxony during state elections in order to serve the green clientele to the detriment of Germany. At its party conference, the CDU has now rejected the levy and decided in addition to the women’s quota almost congruently with the Left Party’s demands for price caps and more social relief packages for the weaker and middle sections of the population, as well as an extension of the lifetime of nuclear power plants. The AfD, on the other hand, wants the sanctions against Russia to be lifted and the rapid return to nuclear power, including Small Modular Reactors (SMR) as Bill Gates and Macron and thorium reactors. So far, the debate has mainly revolved around energy prices for the freezing and common people, but now German business is also loudly speaking up:
““It’s up to its neck in water“: automotive suppliers want to relocate production abroad The car industry in Germany is suffering from the current energy crisis. Many suppliers are therefore considering relocating their production sites abroad.
Berlin – The high energy prices are causing problems for the German auto industry. Because electricity and gas are becoming more and more expensive in Germany, the first automotive suppliers are considering turning their backs on the production site. This is shown by a survey by the automobile association VDA. According to this, 22 percent of the companies surveyed stated that they wanted to shift investments abroad. In contrast, only three percent intend to invest more in Germany in the future. More than half want to cancel or postpone planned investments. More than 100 automotive suppliers and manufacturers of buses, trailers and bodies were surveyed, including many medium-sized companies as well as large corporations. Meanwhile, top economist Hans-Werner Sinn is harshly criticizing the federal government’s energy policy and calling for a quick turnaround. Automotive suppliers under pressure: Electricity prices for industry have doubled since the end of the year „The medium-sized automotive sector is up to its neck in water,“ says Arndt Kirchhoff from the automotive supplier Kirchhoff, who is also VDA Vice President. „Companies urgently need quick and unbureaucratic help, otherwise the lights will soon go out for many medium-sized companies.“
Not only medium-sized companies, but also some large corporations. A fifth are planning to relocate production. Just wondering where? Where is it different in Europe? If not to Russia, then to the Western Balkans or to Eastern Europe? Since Russia is excluded, maybe to China or Asia, or perhaps to the USA, which is more energy self-sufficient and has lower electricity prices? But that might be more expensive and what about supply chains, regionalization and decoupling? Or to Latin America? Brazil and Back to “Volkswurst” People´s Sausage)? In addition, there are elections in Brazil right now and Lula is ahead of Bolsonaro and the first Bolsonaro supporters are becoming militant, will not accept an election victory like Trump and become violent. Well, maybe then a reiable military dictatorship will settle the worst things like in fromer times. But until a new plant is built, there could be a production gap again, along with possible further delivery difficulties with longer distances in supply chains? Especially since the car industry, including the supplier industry, is highly automated and robotized and therefore energy guzzlers, also Tesla and a switch to manual Fordist assembly lines would be difficult, if not impossible, and in this case the shortage of skilled workers would push in through the front and back doors as one was just so proud was to have arrived just in time in the age of post-Fordism and lean production. On the other hand, half of the companies want to postpone or cancel investments in order to compensate for the energy costs, although there was apparently no question as to whether rationalization, expansion or replacement investments were planned. Anyway: Demands have been made to the politicians and they will probably be heard, since no one wants to be seen as the murderer of the German car and automobile supplier industry, be it through lower energy taxes and new relief packages and state aid not only for energy-intensive companies or, like the CDU, through price caps, also at the risk that some utility companies will then go bankrupt, which Habeck wants to prevent with the surcharge lever, since these are systemically relevant like the banks used to be.
In addition to the Russian front, there would be China as the second „systemic opponent“ and here too the question „It’s the economy, stupid“ versus „Security trumps economy“ arises:
„May China’s state shipping company Cosco invest in Hamburg? Federal government struggles to find the right course
Hamburg/Berlin – How much business should German companies do with the rising People’s Republic of China in the future? Should they continue to rely on more and more cooperation? Where is the line to a dangerous dependency on an authoritarian state? It’s a debate that’s been smoldering for some time – and made even more urgent by Russia’s attack on Ukraine. The discussion about a port terminal in Hamburg is currently ignited. The terminal department of the state-owned Chinese shipping company Cosco would like to take a 35 percent stake in the operator of the container terminal in Tollerort in the Port of Hamburg.
You can almost call that a stratgic decision, which anticipates the China strategy that Baerbock announced for next year, whereby the positions between the SPD and the Greens are clear, and Scholz, as a Hanseatic and former mayor of Hamburg, also has a direct connection to Hamburg as the Foreign Ministry under Baerbock and the Ministry of Economics under Habeck are clearly against it. Or will there be a compromise in the form of a lower stake than 35%, perhaps on a more symbolic scale and not in a decisive dimension? The fact that this COSCO offer is coming right now is perhaps a well-calculated Chinese move to test the German government. A 35% stake is well above any blocking minority that would allow China to block or paralyze critical infrastructure, so it can be assumed that this is a maximum demand and is not expected to be met at face value, but it is raises the threshold in order to then get more out of negotiations. Scholz and the SPD would probably get a shitstorm if they gave China a blocking minority. But even if you only allow 5%, 10% or 15% or 20%, the entry would be made and the problem is not over. Because even with a stake below a blocking minority, there is always the possibility for China to use straw men and investors associated with China to expand its shares, its board seats and, in the long term, even to make a hostile takeover based on the Kuka model. The only option that would then remain is the so-called investment screening, i.e. the screening of potential investors, which is not easy, especially since transparency and data protection are categories and the possibility of increasing the share through the back door via letterbox companies, straw men and non-transparent interlinking company structures, especially since if it should be an apparently German or US investor remains. Or would US intelligence agencies, or perhaps even NATO, take over the screening and provide subtle hints? Conversely, it is possible that China could see a complete rejection as a hostile act, could react with countermeasures and put pressure on German politics through its lobby organizations, also in the economy, especially since it sees this not only as a question of a critical infrastructure but the German position on trade and China trade in general. And where does the FDP stand? And the Christian Democratic and Social Union and the AfD? Maybe it’s not „just“ a question of critical infrastructure, but of trade with China in general. Whether Rotterdam or other ports want or can step in? How does the EU react, especially since this seems to be more of a question of national foreign trade law, but as a pioneer of a China and Indo-Pacific strategy, would the Gemrman goverment also go some special German way? Will the USA also get involved behind the scenes or possibly in front of the scenes ? Also: What about the Elbe deepening for larger container ships, not only from China. Don’t forget the fate of the Yellow-belly toad!!!!!!
Another, more marginal warning signal from the economy comes from Bavaria:
„Breweries are running out of carbon dioxide – first production of beverages in Bavaria stopped“
Historically, there have already been many beer revolutions in Bavaria, when the opium of the people was withdrawn from the subjects, although the Oktoberfestival can still put a damper on that. Will Putin also spark a hybrid beer war on the beer front and trigger beer revolutions of the then sobering Bavarians. The Kremlin can be trusted with anything and the AfD would probably demand free beer instead of green socialism.