Carmakers fill boots after record year

German carmakers are swimming in money – selling more vehicles and earning more than ever before, filling their coffers ahead of what managers are warning could be a difficult year.

Carmakers fill boots after record year
Photo: DPA

The remuneration of Volkswagen CEO Martin Winterkorn made headlines this week after it hit €17.4 million, or €1,986 an hour. But this is a drop in the ocean of money earned by VW in 2011, with income reaching €15.8 billion, more than twice as much as 2010.

Other German carmakers BMW, Daimler, Audi and Porsche also broke records in 2011, thanks to booming markets in Asia and America.

The global financial crisis left little more than a dent in the German auto industry, which recovered faster and stronger than many had expected.

But the money now flooding in will be needed in the coming months, car managers have warned.

The continuing European debt crisis and flat-lining economies will not only eat away at finances – but investment will also be needed to develop new technology.

“2012 will be a key year,” said BMW CEO Norbert Reithofer as he introduced the firm’s annual results.

He was echoed by Audi chairman of the board Rupert Stadler who said, “Looking into the future one can certainly not talk of it being all flowers and sunshine.”

VW plans to invest €62.4 billion by 2016, two-thirds of which is ear-marked for making the company greener as well as bigger.

Strong competition will come in the Germans’ target markets, with Toyota keen to recover its position as the world’s biggest carmaker – a title it lost after last year’s earthquake.

Meanwhile, Korea’s Hyundai is growing in the mass market, while the Germans are also looking over their shoulders at the alliance between Opel-owner General Motors and the French owner of Peugeot, PSA.

Workers at Germany’s carmakers have profited from the good results, with Daimler receiving a profits-share of €4,100 for 2011, those working for Audi getting on average €8,251 and VW employees getting a bonus of €7,500.

DPA/The Local/hc

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From lizards to water, eco-bumps snag Tesla’s giant Berlin car factory

In the green forest outside Berlin, a David and Goliath-style battle is playing out between electric carmaker Tesla and environmental campaigners who want to stop its planned "gigafactory".

From lizards to water, eco-bumps snag Tesla's giant Berlin car factory
Tesla's gigafactory outside the doors of Berlin. dpa-Zentralbild | Patrick Pleul

“When I saw on TV that the Tesla factory was going to be built here, I couldn’t believe it,” said Steffen Schorch, driving his trusty German-made car.

The 60-year-old from Erkner village in the Berlin commuter belt has become one of the faces of the fight against the US auto giant’s first European factory, due to open in the Brandenburg region near Berlin in July.

“Tesla needs far too much water, and the region does not have this water,” said the environmental activist, a local representative of the Nabu ecologist campaign group.

Announced in November 2019, Tesla’s gigafactory project was warmly welcomed as an endorsement of the “Made in Germany” quality mark – but was immediately met with opposition from local residents.

Demonstrations, legal action, open letters – residents have done everything in their power to delay the project, supported by powerful
environmental campaign groups Nabu and Gruene Liga.

Tesla was forced to temporarily suspend forest clearing last year after campaigners won an injunction over threats to the habitats of resident lizards and snakes during their winter slumber.

READ MORE: Is Germany’s Volkswagen becoming ‘the new Tesla’ as it ramps up e-vehicle production?

And now they have focused their attention on water consumption – which could reach up to 3.6 million cubic metres a year, or around 30 percent of the region’s available supply, according to the ZDF public broadcaster.

The extra demand could place a huge burden on a region already affected by water shortages and hit by summer droughts for the past three years.

Local residents and environmentalists are also concerned about the impact on the wetlands, an important source of biodiversity in the region.

Tesla Street

“The water situation is bad, and will get worse,” Heiko Baschin, a spokesman for the neighbourhood association IG Freienbrink, told AFP.

Brandenburg’s environment minister Axel Vogel sought to play down the issue, saying in March that “capacity has not been exceeded for now”.

But the authorities admit that “the impact of droughts is significant” and have set up a working group to examine the issue in the long term.

The gigafactory is set to sprawl over 300 hectares – equivalent to approximately 560 football fields – southwest of the German capital.

Tesla is aiming to produce 500,000 electric vehicles a year at the plant, which will also be home to “the largest battery factory in the world”,
according to group boss Elon Musk.

In a little over a year and a half, swathes of coniferous forest have already been cleared to make way for vast concrete rectangles on a red earth base, accessed via the already iconic Tesla Strasse (Tesla Street).

German bureaucracy

The new site still has only provisional construction permits, but Tesla has been authorised by local officials to begin work at its own risk.

Final approval depends on an assessment of the project’s environmental impact – including the issue of water.

In theory, if approval is not granted, Tesla will have to dismantle the entire complex at its own expense.

But “pressure is being exerted (on the regulatory authorities), linked to Tesla’s significant investment”, Gruene Liga’s Michael Greschow told AFP.

In early April, Tesla said it was “irritated” by the slow pace of German bureaucracy, calling for exceptions to the rules for projects that help the environment.

Economy Minister Peter Altmaier agreed in April that his government “had not done enough” to reduce bureaucracy, lauding the gigafactory as a “very important project”.

Despite Germany’s reputation for efficiency, major infrastructure projects are often held up by bureaucracy criticised as excessive by the business community.

Among the most embarrassing examples are Berlin’s new airport which opened last October after an eight-year delay and Stuttgart’s new train station, which has been under construction since 2010.

Brandenburg’s economy minister, Joerg Steinbach, raised the possibility in February that the Tesla factory could be delayed beyond its July planned opening for the same reason.

SEE ALSO: Tesla advertises over 300 jobs for new Gigafactory near Berlin