VW crisis puts Vorarlberg car suppliers under pressure

The crisis facing German carmakers is putting pressure on suppliers in Vorarlberg, ORF reports. Volkswagen plans to eliminate about 100,000 jobs worldwide over the next four years, while production at its plants has slowed.

Vorarlberg, an industrial region that normally supplies large quantities to the automotive sector, is also facing challenges. Experts expect the developments to lead to a loss of prosperity.

Martin Ohneberg, head of the Dornbirn-based automotive supplier Henn, said the industry was still at the beginning of a transformation rather than in a crisis.

“A crisis passes. A transformation means that we have to act,” Ohneberg said. He cited unfavourable competitive conditions and high location costs, adding that Volkswagen had to adapt to the situation.

That process would also bring a loss of prosperity and unemployment, Ohneberg said. “That is simply what politicians are not saying,” he added.

Vorarlberg economist David Stadelmann called for more room for manoeuvre and better conditions for businesses. Lower taxes and charges were essential, he said, along with a reduction in detailed climate rules and a review of Austria’s target of climate neutrality by 2040.

Stadelmann also called for a serious reduction in bureaucracy. He said overlapping rules were a particular burden because many requirements were carried out twice or even three times.

As an example, he cited the carbon price at European level, which he described as the most efficient way to reduce carbon dioxide emissions. Further detailed climate regulations were therefore largely unnecessary, he said.

Neither expert advocated giving up. Ohneberg said punitive tariffs were not the solution. He suggested that Chinese companies investing in Europe could be required to find a European joint venture partner.

The industry also needed to move away from a “fully comprehensive” mentality and show more ambition, Ohneberg said. Despite the difficult environment created by crises, wars and punitive tariffs, he remained optimistic that there was still a chance.