Category: Business

One of Germany’s most persistent challenges is the hindrance to growth caused by the shortage of skilled workers. The Government expects the economy to grow by 0.2% this year, far less than the previously forecasted 1.3%. The main reasons include weak global demand, geopolitical instability, and high inflation rates.

While addressing the media, one of the prominent ministers mentioned that close to 700K vacancies remain unfilled. Germany’s economic growth potential has dipped to 0.7% from 2% in 1980. The fall is expected to plunge further to 0.5% if Germany fails to overcome the worker shortage problem. While presenting the Government’s Annual Economic Report, the Minister said the unfilled vacancies will rise further because of the ageing population.

Despite the challenging situation, promising solutions are on the horizon. The Government’s Annual Economic Report suggests offering monetary incentives to encourage people to work longer and more flexibly in old age. This could potentially alleviate the shortage of seven million skilled workers by 2035, paving the way for a more robust and sustainable economy. Another proposed solution is to reconsider the unemployment welfare benefits for some recipients. This move could potentially inspire more people to enter the workforce, boosting productivity and economic growth.

As per a September survey, over 50% of Germans believe that work will continue to be unworthwhile after the Government’s planned rise in welfare payments and child benefits. Nearly 2.6 million people in Germany in the age bracket of 20-30 currently have no professional qualification. Welfare and aggressive labour market reforms were introduced a couple of decades back. They had to be credited with elevating Germany to an internationally resented competitiveness level following the recessions of 2003 and 2004.

However, Germany won’t be able to fill the workforce gap without migration, making it crucial for the country to become more immigration-friendly. This can be achieved through faster visa procedures, more language courses, and digital access to German companies from other parts, all of which are essential to ensure a steady supply of skilled workers.

Berlin has developed several new laws to make the country more exciting and attractive for migrant workers. These include reducing foreigners’ path to citizenship, expediting visa issuance, and recognising foreign qualifications in the job market.

It is also important to understand that not everyone in Germany is pleased with the thought of more immigration. However, the support for the nationalist Alternative for Germany (AfD) party has peaked and is now the second-most popular party in the country.

Ford Dealers and Ford Fund are making a significant investment of over $2 million in a scholarship that spans ten regions. This transformative scholarship is specifically designed to uplift and support fresh graduates and college students who are passionate about pursuing careers as automotive technicians. The Ford Auto Tech Scholarship is a beacon of hope, available to students from 292 schools across 20 states. It aims to grant 400 need-based scholarships to those currently enrolled or planning to enrol in post-secondary auto programs, paving the way for a brighter future.

The automotive industry is currently facing a significant shortage of skilled technicians, with over 400K technicians needed in the next 3-4 years. In its second year, the Ford Auto Tech Scholarship is not just a financial aid but a comprehensive support system. It is paving the way for rewarding, well-paying careers in an industry that is rapidly advancing towards electrification and software integration. The scholarship is open to all individuals seeking automotive technology degrees or certificates across the ten identified regions. It covers all education-related costs, including tuition, tools, living expenses, and transportation. Moreover, Ford Dealers across every region will be a crucial support system, providing advice, onsite training, and career guidance during the educational journey and career transition. This support ensures the students’ success, making them feel secure and guided in their career path.

Ford has started partnering with TechForce, which will grant each student $5K as financial assistance for education and training in auto and auto/diesel across various accredited institutions. The success stories of previous scholarship recipients are a testament to the transformative power of this scholarship. A student recipient from UTI-Phoenix says this scholarship is a step beyond traditional paths. He quotes: “I’m extremely passionate about pursuing a technical education in automotive technology for several reasons. The primary reason is a lack of women in the workforce, and no family member has studied in a trade. However, I feel I was made for it.” These inspiring stories should motivate and inspire current and future scholarship applicants, making them feel optimistic about their own potential success.

Last year’s contributions led to 200 students getting close to $1 million in scholarships covering four prominent regions – Greater Atlanta, Chicago, Dallas, and Phoenix. For the 2024 Ford Auto Tech Scholarship, students need to pursue a degree in one of the following regions: Greater Atlanta, Chicago, Dallas, Detroit, Kansas City, Phoenix, Miami, Memphis, Seattle, and Cincinnati.

The application remains open through August 31, 2024. The scholarships are rewarded on a rolling basis, and applications are reviewed as received. To learn more about the 2024 Ford Auto Tech Scholarship, visit the TechForce website.

Prevailing Condition of Auto Technicians Shortage

The 2023 Technician Supply and Demand report by TechForce Foundation brought a glimmer of hope, identifying that the total number of automotive technicians employed increased for the first time since 2018. The trend remained unchanged in 2022, with a substantial increase of close to 50,000 in 2023 compared to 2022, when automotive technicians stood at 782,000 and 732,000, respectively.

There has been a significant demand for automotive new entrant technicians, indicating a potential for growth and opportunity in the industry. This demand can be attributed to the increase in that particular sector and occupational separations. Occupational separations include retirements and turnovers from those no longer associated with the industry for any reason.

The National Automobile Dealers Association or NADA reported that 2023 there were nearly 56,000 unfilled auto technician positions. As of June 2023, there were only 258,000 active technicians across various franchised dealerships, depicting an incremental growth of 3% from June 2021, when NADA registered close to 250,000 technicians across dealerships.

Why is There a Shortage of Automotive Technicians?

There are various reasons which can be attributed to the ongoing shortages of automotive technician shortages, out of which some of the prominent ones include-

• The ageing expertised technician is retiring in large numbers every year

• There are no women automotive technicians. As per online data, women represent less than 1.5% of the technician population

• The young technicians have B.Tech as their undergraduate

• A lesser number of technicians graduated from the top 10 largest providers of post-secondary automotive degrees

Why Are Technicians Low on Motivation?

The following are some key findings of why there’s low interest in careers related to automotive repairs-

1. Technicians believe franchised dealers offer better facilities compared to the general repair and fleet and commercial facilities

2. Technicians don’t prefer the OEM warranty work, with more than 4/5^th of them reporting that the warranty reimbursement rates have been unfair

3. Nearly 1/3^rd of technicians cited that their biggest challenge lies with the investments in the initial tools

The Future Outlook

The solution to the automotive technician shortage requires collaboration and commitment from key industry stakeholders. One thing is certain: registrations for electric cars are seeing exponential growth, with the possibility of close to 1 billion sales being achieved sooner rather than later.

A report published in CNN Business revealed that if the existing laws and regulations don’t change, the annual percentage of new BEVs (battery electric vehicles) and PHEVs (Plug-in Hybrid Electric Vehicles) will stagnate by 17-19% by 2050. It is also forecasted that considering that the consumer’s interest in EVs is linked with gasoline prices, the EV market share will continue to hover at somewhere around 30%, and the oil prices will be high.

All these factors eventually lead to a common conclusion: training existing technicians for BEVs would require tremendous effort. The same effort would be needed to “attract” new technicians interested in BEVs, and technicians inclined to use ICE vehicles would be required in large numbers in the future.

It is worth noting that the remedy to the above problem would require a pan-industry effort to the following-

1. Lessen the turnover of existing technicians by ensuring they have defined career paths to achieve their personal goals, with timelines and metrics – demanding a robust dedication from tech and dealers management

2. Establish and ensure a robust pipeline of technicians is in place via

• Prolonged dealership management relations with educational institutes offering automotive programs

• Deeper dealership commitments through donations, technician shadowing & career days

• Involvement of dealerships in OEM programs providing apprenticeships, continuous education, as well as certification