1. Volkswagen AG is considering factory closures in Germany for the first time in its 87-year history, parting with tradition and risking a feud with unions in a step that reflects the deep woes roiling Europe’s auto industry. After years of ignoring overcapacity and slumping competitiveness, the German auto giant’s moves are likely to kick off a broader reckoning in the industry. The reasons are clear: Europe’s efforts to compete with Chinese rivals and Tesla Inc. in electric cars are faltering. “VW is recognizing just how serious the situation is,” said Harald Hendrikse, an autos analyst with Citigroup. “We’re living in a difficult geopolitical world, and Europe has not won that battle.” With car sales still nearly a fifth lower than pre-pandemic levels in Europe, manufacturers including VW, Stellantis NV and Renault SA were operating more than 30 factories at levels analysts consider unprofitable, according to data from Just Auto. That includes Volkswagen’s sprawling home factory in Wolfsburg — Europe’s largest. (Source: bloomberg.com)
2. Chancellor Olaf Scholz has described the results of two state elections in east Germany that saw massive gains for populists as “bitter” and warned mainstream parties against forming coalitions with “rightwing extremists”. The Alternative for Germany won the election in Thuringia, the first time a far-right party has secured victory in a state election in the country’s postwar history. In the neighbouring state of Saxony the AfD came second to the centre-right Christian Democratic Union (CDU), garnering 30.6 per cent of the vote, just behind the CDU’s 31.9 per cent. The election was a disaster for the three parties in Scholz’s coalition, his Social Democrats, the Greens and the liberal FDP, which all saw their share of the vote slump. The Greens and FDP did so badly that they will no longer be represented in the Thuringian parliament. (Source: ft.com)
3. Eurointelligence:
Brandenburg was the state known for royal fireworks in Potsdam, where Prussian kings resided and for whom Johann Sebastian Bach wrote his famous concertos. The Brandenburg state election on September 22 could produce a firework of a different kind.
For Olaf Scholz’s SPD, this is the most important of the three state elections because this has an SPD-run state since unification. Brandenburg is one of the last SPD strongholds in the country. The president state premier is Dietmar Woidke, who has been in his job since 2014. In the 2019 election, the SPD was the largest party, followed by the AfD and the CDU.
The current polls have the AfD in the lead with 24%, followed by SPD, CDU and Wagenknecht, in a range from 17-20%. The Greens and the Left Party are polling at exactly the 5% threshold for representation. The result will depend to a large extent on whether they are both in, both out, or one in, one out. The error margin of these polls allows for many possible outcomes. Moreover, the latest poll is a month old.
Last Sunday’s election will probably have a trend-begets-trend effect as we often observe after elections: The winner’s poll rating improves shortly after an election. Sahra Wagenknecht has been one of the relative winners. BSW is no longer just an idea but a concrete political party that wins seats in elections. The elections in Saxony and Thuringia gave her the role of the power-broker. We would expect her to keep doing well.
For the SPD, the news headlines right now are awful. If the SPD were to lose its safest state, this would indeed be a moment that could affect the politics of Berlin. (Source: eurointelligence.com)
Keep reading with a 7-day free trial
Subscribe to News Items to keep reading this post and get 7 days of free access to the full post archives.