What is the situation in the automotive industry now?
We see it from two perspectives. We make plastic parts or subassemblies made of these parts. These are delivered directly to the line and manufacturers use them to assemble cars. Then it is a long-term investment, when plastic parts are made by injection molding. For this you need a proper press and a mold, which is so complex that it is often more expensive than the press itself. At the same time, we produce molds for projects that will start in four to five years.
So we can see into both kitchens, and the first one is running pretty normally, although maybe it’s skewed from our perspective by the fact that we’re already supplying enough parts for electric cars.
In any case, the same cannot be said about long-term investments. For at least two years, we have experienced a decrease in orders, in my opinion because there is no investment. Not so many new models are being developed, facelifts are not being done.
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Can’t China and the outflow of orders to it play a role?
To some extent, this could be due to this. But I think that what could be transferred there has already taken place, and only the most time- and complexity-demanding projects that would be risky or impossible to move to China remain.
Where three combustion engine models and ten facelifts used to be developed, today there is one model and two facelifts
What do you think is behind the investment restrictions?
It is an uncertainty in the market. It took a long time for automakers to be convinced to produce electric cars. Then they overdid it again with wall-to-wall style. At first, electric cars were on the fringes of interest, then after years of resistance, everyone agreed and said that they would only produce them.
Now China has stepped in, where its cars initially failed crash tests. Now they meet them and her cars appear on the unprotected European market.
Where previously three models of a new car with an internal combustion engine and ten facelifts were developed, today there is one model and two facelifts. And the number of factories in the Czech Republic, and thus in Europe, remained the same. Previously, three tool shops applied for ten projects, now they are competing for two projects.
Can you explain the vulnerability of the European market?
It is unpopular to say customs. Modern times say that borders should be open. On the other hand, the conditions in China are diametrically different. How much money and under what conditions people work in China is incomparable to Europe.
We experienced this ourselves on the household appliances we produced. Today we do not produce anything in this segment because the Chinese make everything cheaper. Robotization won’t help either, because raw materials are already cheaper in China for some reason. Even European steel mills sell in China perhaps half as cheaply as in Europe, because they want to sell there.
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So you’re saying globalization isn’t working?
Talking about the fact that there will be globalization and we will make sophisticated things here, and they will make simpler things there, is nonsense. It’s the exact opposite. Sophisticated cars are starting to drive here from China, the assumptions of globalization have absolutely not been fulfilled.
The Chinese sucked what they could out of us, in the sense that European companies sent consultants there who brought new technological procedures, know-how. What took a hundred years here took ten there. And now we are reaping the bitter fruits.
A terrible mistake was made to open up the world to globalization in the naive belief that it would work. But it can’t, because when we talk about the Chinese, for example, they are no friends who want to help us. They are people who go hard for what they want.
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What do you think about the transition to electromobility?
I am a supporter of electromobility. But it’s overkill. What can a normal person think of this when Germany tied its own hands by shutting down nuclear power plants due to an overreaction to the 2011 Fukushima accident at the same time as it was pushing for the transition to electromobility.
That’s seventh grade physics, knowing that if I shut down the nuclear power plants, I’ll have to replace them with something. The enormous volume of gasoline and diesel that flows through all the engines in Germany in a year will have to be replaced by new power plant output. In my life, I have never seen a calculation of how they want to do it. Those who decided on it rode on the wave of hysteria and the desire to fulfill the goals set for them by the Green Party, which was in the coalition.
In addition, when the carbon footprint is addressed, according to some scientists, an internal combustion car does better. Eyes closed to all this. Those people see the world through the window of a government office, gather at meetings in suits and solve, with forgiveness, bullshit.
What took a hundred years to develop here took only ten years in China
Could dependence on China have been prevented?
The fault was short-sightedness. Everyone flocked there. In our business, anyone who didn’t make molds in China was out. Managers had to order from China. We have proven many times that it is not cheaper, because additional costs, for example for transport, were added. The molds are heavy, they were mostly transported by air. We sent messages to customers that it was actually more expensive than ordering the mold from us. But buyers didn’t take that into account.
Is it possible, as was discussed during covid, to return production to Europe?
Transportation was about six times more expensive during and after covid than before and everyone seemed to be mad at the Chinese because covid originated there. However, shipping costs have come down again, the shock has worn off, and everyone is myopic again. It’s cheaper there, so we’ll order it there. There is no return to Europe, perhaps only on a small scale.
But when the world is, unfortunately, divided and it is not excluded that China will cross paths with the United States or Europe, how can we be so dependent on it? Any war would take a few days to run out of all the basics like screws. In Europe, apart from some highly specialized ones, no one makes them – everything is from China. How can I wage war somewhere, repair equipment, if I run out of screws in two weeks?
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Can pressure on prices lead to the collapse of some companies?
Certainly. We see it in tool shops, some of which have already ceased operations.
Support for electric cars has changed or ended in some countries, and interest in these cars dropped significantly last December. What do you think about subsidies in general?
Subsidies are evil. I am convinced that if I wake up in fifty years, economics and political science textbooks will say that subsidies were an evil that distorted the economy and caused many deaths.
There is no calculation that would set a limit and say that this is still a reasonable subsidy, and this would be too much. For example, Henry Ford certainly did not receive any subsidies from the American government for the production of cars on the line. And yet it took off because the idea was right. Perhaps the electric car would have gained ground fifteen years later without subsidies, when the time was ripe for it.
If we look at the prices of new cars, they are up to hundreds of thousands of crowns more expensive than their previous versions. Will people still buy them?
People probably have money for now, but one day they will run out and will not be willing to pay such a price. In addition, it is not certain whether the power plant capacity will be sufficient if a large part of the switch from gasoline and diesel to electricity. I haven’t seen anywhere how many power plants would be missing to make it realistic.
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2024-03-12 18:00:00
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