German carmakers flood jobs market with managers after wielding axe | Hacker News Reader

German carmakers flood jobs market with managers after wielding axe

ft.com

Not a scientific study, but here in the UK where we don't have tariffs against Chinese car manufacturers, there are loads of electric BYDs and Jaecoos (the "Temu Range Rover") driving around recently.

Yeah with China pumping state subventions into car manufacturing, they can outcompete any car manufacturer anywhere in the world. The leading battery technology is in Asia anyways.

The German car industry will not die completely, as the EU can protect its market from chinese manufacturers through regulation. But it will shrink and transform. Probably also back to fossil fuels (yuck), because there the Germans still have a lead (they are trailing with EVs).

Germany's new hot industry is defense technology.

They're also making cars that people want to buy for a price they can afford. Toyota aren't making any cars I want to buy (at any price).

And yet the Toyota RAV4 hybrid is selling so fast in the USA that customers can barely find one at a dealership.

At least in the US, Toyota is wildly successful across every segment. The RAV4, Camry, Corolla, and Tacoma do massive numbers, even though the compact and midsize sedan market is collapsing. Even niche offerings like the GR Corolla can be challenging to procure from a dealer. The Toyota Tax in the used market is unbelievable. For a huge number of people, there is no manufacturer that gets even close to the same amount of respect that Toyota does. Their victory was so overwhelming that it permanently changed how manufacturing is done and an entire generation of prideful Americans will readily admit that the Big Three were on the back foot in the 80s and 90s. Not to say that China isn’t capable of something similar, but you do have to understand that your tastes/value assessments are very much not representative of the sizable US market on the whole if you would seriously take a Sentra over a Corolla, or an Equinox over a RAV4. The calculus may be a bit different in the European market, of course.

German car industry can produce state of art ICE, because they can manufacture the heart of ICE - the engine.

German car industry is trailing with EVs, because they can not manufacture the heart of EV - the battery.

I think the biggest problem with German EVs are not the battery but the software. EVs are practically computers on a wheel and compared to the competitors the software and features it offers are still terrible. I remember VW even had a huge joint venture with Rivian to get things back on track. But seems like it didn’t work out

Is the Chinese automotive software better than the German equivalent?

> EVs are practically computers on a wheel

aren't all cars these days?

>EVs are practically computers on a wheel

There’s nothing about EV drivetrain that requires more complicated software than ICE powertrain. It’s just consumerism telling people that their next vehicle (whatever drivetrain) should be an iPad, a home cinema, and a PlayStation all-in-one.

The biggest problem with German EVs are not the software but the battery. The battery is the most expensive component in an EV:

https://thundersaidenergy.com/downloads/electric-vehicle-cos...

As EVs are computers on a wheel, there is no reason why the same computer can not be installed into an ICE car.

that's not the issue, you can buy the batteries if you wanted to. The problem is that EVs require about 50% less labor than ICE cars and this is the first time since the 80s that German car companies have started to fire anyone or close plants. Car companies here aren't price competitive, software or a battery you can always purchase.

China has the big advantage of having designed these car companies around drastically reduced labor needs and until we adapt to that we're not going to compete on the most important factor which is how much the car costs.

I hope they can compete with plugin hybrids. We have a BMW X5 plugin hybrid, bought on the advice of a friend, and it's such a great car. Almost always on electric in town, and for the rare times we go on road trips we never have to worry about range anxiety.

I really feel that plugin hybrids with 40-50 miles of electric range are the ideal car for like 85%+ of Americans whose usual daily commute could all be done on electric. I've heard all the arguments against them, and after owning 2 PHEVs (Chevy Volt before this), I disagree with all these arguments. Yes, I understand that they're more complicated that a pure EV, I know pure EVs will be the future (I'll also be dead in the future), but my ownership experience with PHEVs over the past decade proved they were the perfect car for me. Never had any reliability issues, and despite hearing arguments that they are "the worst of both worlds", they were definitely the best of both worlds for me - all the benefits of an EV (low operating cost, fantastic acceleration, quiet, smooth ride, almost no trips to the gas station) with none of the downsides (didn't need to install an expensive charger at home as the wall charger was sufficient, never had to worry about range anxiety, never had to carefully plan road trips around charger locations).

I think you're directionally correct. But that BMW will likely turn into a maintenance nightmare in 10 years when electronics modules start failing and new replacement parts are no longer available. Might be best to lease it instead of buying for those who can afford that option.

> German car industry is trailing with EVs, because they can not manufacture the heart of EV - the battery.

"We tried nothing and we're all out of ideas!" ... The German car industry could have seen the EV revolution coming a mile off, but instead of embracing it, it did nothing. Well, it faked some diesel tests, so I suppose not nothing, but not useful.

Last time the Germans got into defence technology, it didn’t end well for the whole world. Let’s hope it wouldn’t be the case this time

Well, the intention is much more really-actually-defensive this time.

Germany is currently the world's fourth biggest weapons exporter, and AIUI that's roughly how it has been for decades.

Man, every time where there's a Chinese product category you realistically can't compete with - it's always some excuse of - because Chinese state is subsidizing it and supporting it.

All it does is simply makes the Chinese government sound good and competent.

Oh, nice, a government that does good things that lead to good outcomes! How unusual, how unexpected! That's basically cheating!

We can't realistically have our government be useful and competent and serve our interests, so there's no way we can compete!

Capitalism and free markets failed to deliver, lots of cope around that mental model. If it was superior, it would’ve succeeded. China is 1/3rd of global manufacturing capacity, and it shows. Play to win.

It was the market that delivered BYD and Xiaomi. The government did his part with industrial policy and inviting Tesla to China to help start the ecosystem, but the brutal competition between Chinese auto makers following the rules of capitalism and free-market made those who survive the ones that can compete with other global companies. Before that they just subsidised and all they got were regional "champions" that siphoned out the funds and created shitty products no one wanted.

After Tesla came with special laws allowing it to work without Chinese co-ownership, but with a mandate to source from Chinese suppliers, this created the ecosystem needed for the next iteration, by the capitalist urge of Elon to get into the market and by free-market economy of suppliers to Tesla that are up to the standards to supply it.

The government set up the battlefield, and let the free-maket filter the strongest to survive.

In the Western countries the government and regulations are frequently the bane of the car companies. Good luck opening a mine or a battery factory in Germany, regulation, unions, green mandates, 36 hr. week. You can't fight with 1 leg tied.

This narrative overweights free market competition in China and any influence Tesla or Musk might have had versus the $230B in subsides provided to the Chinese EV industry over 14 years (2009-2023), with over ~$1.5B provided to CATL alone (although Tesla did receive ~$17B in total government subsidies in the US). Tesla did not begin production in China until October 2019.

If there’s any hero story here, its the will of the CCP to provide this level of support and subsidy to the Chinese battery and EV industries as part of their five year plans. This is why China can build ~20M EVs per year, Europe ~4.6M, and the US can build ~2-3M.

I understand this deeply challenges the ideas and belief systems around the cult of personality of risk taking entrepreneurs and entrepreneurship being something more than a series of successful calculated risks and bets.

https://ev.com/news/csis-study-finds-chinas-ev-industry-boos...

> When it comes to China’s electric vehicles (EV) industry, its market has expanded exponentially compared to other markets. Now, a new study by the Center for Strategic and International Studies (CSIS) has revealed that China’s EV industry received at least $230.8 billion in government support between 2009 and 2023.

> As a result, this major investment has played a pivotal role in China’s rapid progress to become the world’s largest EV market, with sales anticipated to reach 10 million units in 2024.

https://www.csis.org/blogs/trustee-china-hand/chinese-ev-dil...

https://www.csis.org/analysis/coming-nev-war-implications-ch...

Yes, there was investment, but investment without free markets and capitalism doesn't work usually for end products like cars. It's not a linear function of the capital invested, it's not possible to spend your way into good consumer products. That's not infrastructure. That's why I was mentioning that before Tesla came that investment didn't lead to any strong EV automotive players. In 2016 there was a big scandal on widespread EV fraud, where manufacturers just built to get the subsidy(骗补).

The policy shift came around 2017 when the government understood that subsidies and closed market created lazy automakers (e.g. check the US market for the same dynamic in trucks). In 2018 they removed subsidies for cars less than 150km of range and changed the requirements to receive them tying them to battery density.

After Tesla came and subsidies were reduced, most of the inefficient companies went bankrupt. It was the free-market competition that killed them. The reason why it changes was the competition not the subsidy. The subsidy was somewhat important, but as many of us knows, nothing government run produces good consumer products, you need market and free choice to get productivity. So it was the free-market and subsidy cutting that created the BYD, Li Auto, Xpeng and Nio. That's the proof that without free market it's impossible to have strong companies. And without subsidies you can have strong companies, even if it takes more time.

In EU and USA subsidies didn't create a lot (Northvolt?), because there were not enough free-market driven demand and too much regulation to jumpstart the free-market forces that will start the engine of innovation.

So the answer is not "capitalism and free-market doesn't work and governmental industrial policy is the answer", but it's the market that creates the strong companies. You can speed it up with venture/government capital, but without the brutal competition in the marketplace where people vote with their wallets you won't make it work.

It's an interesting comparison. In China they prop up businesses with cheap loans and help from local governments, in the US it's the VCs. So when Uber was subsidized then everything was ok, but when China state propped up EVs then suddenly it's not ok. These subsidies in the majority of cases are over btw, because competition was too big in China between carmakers, cars in China are ridiculously cheap. Because that's their strategy, you fund a lot of players, like there were 100+ EV makers in China, then you let the market do its job, they optimize or they die, some will die and the best will prevail. Margins are so low in China that they are looking at outside markets where legacy carmakers need to drop the margins and scale up or they will have no chance in competing. And for the argument that they do it to kill the industry so then they can make cars for more price, the most obvious counterargument is why they didn't do it for everything else that they dominate already? Why are solar panels going down? They dominate the world in solar panels, there is basically no competition and prices are still going down, same with batteries.

The BYD cars are in Germany too, I see them quite often in cities

Yeah I can get a byd dolphin for half the price of the cheapest tesla. I'm sure the 2 aren't equally comparable, but considering all we need is a second car for my wife to drive at most 20-30 miles per day, I could never justify a tesla for that.

At least I hope they leave the corporate culture baggage that has ruined the German car industry behind and do not transplant it into other companies. In which you stick to your old guns and hope that politics protects you with tariffs against any future developments from international competitors on the car market. (It failed. Now the Chinese make better cars than the Germans.)

There is no chance that they will leave it behind.

No chance. Hiring these people will be toxic for any companies.

https://archive.vn/uomrZ

Credit Suisse went down 2 years ago in Switzerland, flooding the market with finance and IT people...

I didn't realise that the firm no longer existed, but yes:

"UBS Completes Historic Takeover as Credit Suisse Ends" (May 31, 2024) <https://www.bloomberg.com/news/articles/2024-05-31/ubs-compl...>

But do they dual-wield?

Yeah, the title is worded quite oddly.

Only handaxes.

Going for the extra crit chance.

These corporate fads always run in cycles. Any large organization needs some resource managers but what is the optimal span of control? What tends to happen is that businesses lay off a bunch of managers and flatten the hierarchy. This does increase efficiency for a while. But then it becomes harder to keep individual contributors on track and focused towards key goals so the executives eventually end up hiring more managers again.

I remember seeing a video that labels these people as doing bullshit jobs. As an example in UPS the people that actually delivers the packages are the ones doing the real work. However between those workers and CEO there are like ten or more levels of management and all those people just sitting at an office doing basically nothing.

Same with VW or with any other traditional German company. Sometimes to justify their job they would create problems that doesn’t exist and come up with a solution

I don't know what is the right amount of management, and I'm sure there are some management roles that add no value, but it seems to me that you cannot have UPS function with just a CEO and, say, 10000 delivery drivers and no middle managers.

its just people underestimating what people do in their actual jobs. Every thing has a huge long tail of work. things like 'accounting' is obvious but there are entire jobs around just buying stuff, around logistics, around fleet management, around managing your staff (HR), there are LOTs of specialized roles and they're not all dumb because you think they don't do anything.

Even in accounting there are many roles and subspecialties!

I think you misunderstood my comment, I was talking about different layers of management. Not different roles like accounting or sales etc. but there is absolutely no reason to have 10 different layers of management.

for someone like VAG or UPS why not? You can only remember/cram so much context into a single persons head, at some point you gotta split it up. In IT, you rarely see companies having managers with more than 6 direct reports. Of course in retail that number can bump up. But if you have a 4 or 5 thousand employees - you'll have 6 layers. Of course there are ways around it (I worked at F500 where i only talked to my boss rarely, and was managed by others on my team).

VAG employs 600,000 people - that you have 8 or 10 layers is not absurd.

Sure, but as a point of comparison the Roman Catholic Church has even more people worldwide and manages to make do with only 4 management layers. (I'm referring to those in religious orders only, not secular employees of various Catholic businesses and charities.)

Yes the Catholic Church still employs people besides priests but that's a good one!

We’re now 50 years in on a personal computer revolution, and people on HN and elsewhere haven’t managed to escape industrial-style management thinking.

If we can have billions of people organised - in their time away from formal work - into small working groups (“families”) generating a crazy amount of value for themselves and their communities, with no overarching management structure, what is possible today?

Franchises are often very light on layers of management yet have hundreds of thousands of workers.

The larger the enterprise, the less it has to look like an industrial firm.

Information flow, coordination and oversight don’t require layers and layers of managers, it’s just that those managers prefer it, since they’ve never seen anything else, they get paid more for “their important work” and have status for managing managers.

Change that and we might be in quite a different, probably better world?

There's alot of overestimating on the need and value of "services". There's decades of teaching that service economy is the pinacle of advanced economies. Middle management bloat is "advanced service economy". And what is happening is an end of a myth

They found out that manager do not, in fact, design, manufacture, test or sell cars.

Also, wielding axes in a working environment is a big no-no, no wonder they're out.

managers shmanagers

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