{"id":3401,"date":"2026-07-22T08:37:52","date_gmt":"2026-07-22T08:37:52","guid":{"rendered":"https:\/\/interstatelogisticshubs.com\/?p=3401"},"modified":"2026-07-22T08:37:52","modified_gmt":"2026-07-22T08:37:52","slug":"the-death-of-the-cash-cow","status":"publish","type":"post","link":"https:\/\/interstatelogisticshubs.com\/?p=3401","title":{"rendered":"The Death of the Cash Cow"},"content":{"rendered":"
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Looking at the global automotive market, one conclusion is unavoidable: the end of the combustion engine is nowhere in sight. The ideological crusade against Germany\u2019s industrial backbone has merely led to the slaughter of the country\u2019s automotive cash cows.<\/p>

Read more Catholic politicians and the weeds in the wheat<\/a><\/p>\n

The reasons behind the decline of Germany\u2019s automotive industry will remain subject to debate. But one thing is clear: an energy policy detached from economic reality, driven by climate-apocalyptic ambitions, has harmed the industry at least as much as strategic mistakes at the management level.<\/p>\n

A lack of cost flexibility and a German labor system rooted in the moral foundations of the post-war economic boom have made the adjustments necessary in the face of fierce competition from China, the United States and increasingly India far more difficult.<\/p>\n

German corporatism has also done companies a disservice by narrowing technological choices according to a familiar ideological compass. The end of the combustion engine is a collective product. Political leaders and institutional actors share the same conviction: pave the way with subsidies and taxpayer money toward a fully electric golden age.<\/p>\n

Meanwhile, almost quietly and somewhat embarrassingly, the industry has begun relocating production of its traditional combustion-engine models abroad.<\/p>\n

It is simply unhealthy for an economy to stand too close to the political fire. In times of crisis, companies are left exposed to the harsh winds of global competition — and so are the workers whose jobs disappear by the hundreds of thousands.<\/p>\n

The reality looks different from the political narrative. Around 95 percent of vehicles worldwide are still powered by traditional combustion engines. Among new registrations last year, fully electric vehicles accounted for roughly one quarter. Nearly two-thirds of newly registered vehicles still have a combustion engine under the hood. The remainder are hybrids.<\/p>\n

There is no doubt that the long-term technological path is moving toward hybrid drive systems. Traditional combustion engines offer limited prospects for new investment.<\/p>\n

Nevertheless, this enormous market would have been the necessary cash cow for German automakers and their suppliers. The profits generated from combustion-engine vehicles could have provided the financial strength needed to invest in new technologies according to actual market developments.<\/p>\n

This transformation would have taken place at the German home base if an ideological fervor among saturated urban elites had not emerged — a fervor that turned against the country\u2019s own automotive industry and initiated a form of industrial self-destruction.<\/p>\n

The fundamental mistake lies in Germany\u2019s corporatist model. The country rushed into an immature technology with flags flying high, encouraged by politicians who believed the future lay entirely beyond fossil fuels.<\/p>\n

\n

\"\"<\/figure>\nThe theory sounds attractive: borrow cheaply, pool government debt at Germany\u2019s favorable financing conditions, create the necessary technological foundations and production capacities, and secure pole position in electric mobility from the beginning.<\/p>\n

But the devil, as always, lies in the details. It would be the first time in economic history that a centrally planned strategy permanently moved ahead of market reality.<\/p>\n

The pressure on German manufacturers has grown since China succeeded not only in closing the technological gap with European producers, but in reopening it in certain areas to its own advantage. Beijing is also fighting the emerging weakness of its domestic economy with massive subsidy programs.<\/p>

Read more DSA members exhibit their rabid hatred for America and we should be very concerned<\/a><\/p>\n

It is therefore hardly surprising that German manufacturers have come under enormous pressure in the most important automotive market in the world.<\/p>\n

At the same time, the consequences of Germany\u2019s energy transition, sky-high energy costs, excessive regulation and rigid labor laws have made the domestic location increasingly unattractive for additional investment.<\/p>\n

The cash cows that policymakers had already written off are now grazing elsewhere. It is not the combustion engine that is disappearing — it is the value creation surrounding it.<\/p>\n

Volkswagen\u2019s Passat is now produced in Slovakia rather than Emden. The new Volkswagen Transporter is built at Ford Otosan\u2019s plant in Turkey, while Audi produces the Q3 in Hungary. Mercedes has moved a significant part of its compact-car production to Kecskem\u00e9t. Large premium SUVs from German manufacturers have for years largely rolled off production lines in the United States or Slovakia.<\/p>\n

The truth is simple: production takes place where the combustion engine generates the highest returns —\u00a0and Germany is clearly no longer one of those locations.<\/p>\n

Around 130,000 jobs have been eliminated in Germany\u2019s automotive industry in recent years. Once second-round effects are included, roughly half a million jobs may have been affected by the crisis. A lost position in core automotive production typically leads to two, if not three additional job losses along the supply chain and through declining purchasing power in the surrounding regions.<\/p>\n

Eastern Europe, economically held back by socialism until the end of the Cold War, now benefits from capital flowing out of the West. These countries enjoy the secondary effects of combustion-engine technology — investments, employment and value creation in mechanical engineering, chemicals, logistics and related services.<\/p>\n

In effect, Germany is conducting a form of free industrial policy for these regions.<\/p>\n

The tragedy of Germany\u2019s automotive industry is not that it failed to recognize technological change. On the contrary: few industries have invested more resources over recent decades into researching new drive technologies.<\/p>\n

The deeper problem is German overconfidence: a hidden statism and an arrogance cultivated by decades of undeniable success — the belief that Germany could not only identify the technology of the future but also predict its entire development path.<\/p>\n

A mixture of technological hubris and a belief in unlimited manageability — a character flaw that prepares the ground for failure.<\/p>\n

To believe one can outsmart the market, to know more than millions of economic actors operating through decentralized information networks: Is this the German disease?<\/p>\n

Markets cannot be controlled by decree. In the end, the price mechanism of a free market remains vastly superior to any ideological system of economic control.<\/p>

Read more Obama Dreamer who murdered his girlfriend now wants $75 million because Trump made him the poster child for open-borders crime<\/a><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Looking at the global automotive market, one conclusion is unavoidable: the end of the combustion engine is nowhere in sight. The ideological crusade against Germany\u2019s industrial backbone has merely led to the slaughter of the country\u2019s automotive cash cows. 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