If Roald Dahl’s stories were rewritten with industrial policy in mind, “Charlie and the Chocolate Gigafactory” would be a European bestseller. Nothing inspires childlike wonder among politicians like the manufacture of electric vehicle (EV) batteries and other critical technology across an area equivalent to scores of soccer fields. Governments shell out subsidies by the billions to win the golden ticket of greening the grid and onshoring jobs, while reducing reliance on China.
As in the original, though, the race is not without risk. Last week Ford Motor Co got US$9.2 billion in US government loans and Intel Corp received a US$10.9 billion German subsidy package — which on a per-job basis is getting into six-to-seven-figure territory. With more than 300 gigafactories in the pipeline, the war for talent is running hot. Amid a post-COVID-19 worker crunch, there have been hiring and training bottlenecks such as at General Motors Co or Tesla Corp, which makes ramping up production harder — something highlighted by a recently released European auditors’ report on battery policy.
The shortage of workers needed to power the green transition needs more discussion — and action — at a time when economic security is usually associated with critical raw materials and strategic investment funds like in Italy and France.
The numbers are stark: Europe’s battery industry is eyeing the creation of 800,000 jobs through 2025, and the design know-how is concentrated in the US and Asia. And that is only in batteries — solar and wind energy would likely add another 650,000 jobs over the next eight years. A Europe that wants to create some distance from Chinese suppliers will need to conjure a new workforce at a time when demographic trends are in decline and anti-immigration parties are gaining share.
One obvious answer is to train more engineers.
However, that would take time and effort — France, for example, pumps out 40,000 engineers a year when it needs 60,000, according to a report by think tank Le Millenaire. The real optimism is in retraining staff from existing industries, such as the manufacture of combustion-engine vehicles that are out of step with a net zero world.
Estimates of auto industry job losses from electrification vary, but according to industry association CLEPA, 500,000 are at risk, with the bulk between 2030 and 2035. That suggests a reservoir of workers that could ride the energy transition rather than be washed away by it.
There are some positive examples. In northern France, a gigafactory cofounded by automaker Stellantis NV is organizing the transfer of more than 200 local staff using a new “Battery Training Center.” The prospect of switching blue overalls for the white outfit needed in a clean, dry battery factory, along with a competitive wage, is attracting workers — including those from other industries like pharmaceuticals.
“We are snowed under with applications,” recruiter Salima Menai said, adding that hiring bottlenecks are starting to ease.
A somewhat similar story from March saw a Stellantis vehicle factory in Slovakia lay off fewer people than predicted thanks to EV job transfers.
The problem is that so far reskilling has yet to really deliver at scale.
A Bruegel study in January showed that the proportion of European adults participating in formal or informal training was below the EU’s aspiration of 60 percent in all but two countries. The urgency of politicians, think tanks and chief executives does not always translate well to a workforce that might not have the time, incentives or ability to retrain or reskill.
Well-meaning corporate “academies” lack the experience and competence to manage education programs long-term. Regions that are economically dependent on fossil fuels might find the barriers to transition higher than others, as research on Central Europe’s auto industry suggests.
What is missing? Maybe a more targeted industrial policy that goes beyond the subsidy race. The Swedish model might be one instance, as one of the few countries that is above the target for adult learning: It offers significant financial incentives for retraining. Maybe the example of the US Inflation Reduction Act should be to attach more conditions to government freebies: A childcare provision has been tied to US chip-manufacturing funding, which could encourage more women and people from underrepresented backgrounds to enter critical industries.
If all else fails, there is always the nonfictional chocolate factory. Steve Doyle, boss of UK recruiter EVera, thinks hiring will have to get creative.
He has likened specific stages of the lithium battery production line to other types of work, comparing lithium powder mixing to Nestle’s production of KitKats — maybe not quite where European policymakers want taxpayers’ billion-dollar subsidies to end up.
However, with the winds of a potential recession blowing and with some industries like packaging already in one, golden-ticket holders will have reason to cast a wider search for workers.
Lionel Laurent is a Bloomberg Opinion columnist covering digital currencies, the EU and France. Previously, he was a reporter for Reuters and Forbes.
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