Arne O. Holm says The Green Pipe Dreams Torn Asunder by an Arctic Storm
Screenshot from Northvolt's website. CEO Peter Carlsson is pictured down to the left.
Comment: The Swedish battery company Northvolt is heading toward bankruptcy. In that case, it would be a gigantic setback for the European and Arctic investment in the green shift. In addition, it would be the most expensive adult education of all time.
It has been windy in the North lately. So windy that the industrial pipe dreams lie scattered.
The battery company Freyr once promised to establish 2,500 jobs in Mo i Rana, Northern Norway. After moving its operations to the US, there are barely any jobs left in Mo. The so far final layoffs are currently being processed.
From its new home in America, Freyr is kneeling on American stock exchanges.
In Northern Sweden, Northvolt, a European battery titan, has fired a fifth of its workers. 1,600 employees, of whom 1,000 were employed in Skellefteå, are losing their access cards. In other Arctic countries, not least in Norway, it has long been a mantra to look to Sweden and what it has achieved in the North.
An endless debt
Looking at Northvolt and Northern Sweden today, one sees right into an endless stack of promissory notes and accounts written in red markers.
Fires 1,600 employees
Without stretching the comparison too far, something similar is happening in Narvik municipality in Northern Norway.
TECO 2030, which was supposed to produce fuel cells and establish 500 jobs in Narvik, is flagging out. Nobody knows what, if anything, will remain in Norway.
How far Aker Narvik's grand plans for ammonia production have progressed is, at best, unclear.
The situation in Narvik is perhaps best described by the former leader of the Norwegian government's Total Preparedness Commission, who, in his position as head of Narvik Industrial Park, says to the local newspaper Fremover that "Narvik can not handle any more airy plans that end in nothing."
In the same breath, he launched an industrial park worth NOK 2.5 billion and a steel industry pellet mill worth NOK 10 billion.
Airy promises and fat presentations
Some common denominator
The various projects that crash, are postponed, launched, or flag out have significant differences but also some common denominators.
Two of them are airy promises and fat PowerPoint presentations.
But the battery factories, whether they are called Northvolt or Freyr, also score high on a few other parameters. They lack expertise in leadership and product development and overestimate the European market in the same way they underestimate China.
Above all, they lack the necessary labor and depend on attracting international laborers in the thousands.
For example, the Swedish Migration Agency has presented numbers showing 1,700 Northvolt employees come from countries outside the EU/EEA. Many of these were lured northward and now sit empty-handed outside the factory gates.
Calling for the state
Another common denominator is the demand that the state provide money to compensate for the lack of expertise in leadership and production. Both the Norwegian and the Swedish mostly dismiss these demands.
The world's most expensive adult education.
That is a wise decision.
The state must play an active part in the business policy, particularly in the North, but that must be within industries with a natural advantage.
The belief that Northvolt will survive is limited by the company's debt of about NOK 60 billion. The problem with debt is that it must be repaid at some point, which requires the borrower to make money.
Possible bankruptcy
Northvolt does not.
Thus, this could quickly end in bankruptcy, with ripple effects for companies far beyond the battery producer.
Not only would a possible bankruptcy be one of the most spectacular in Swedish industrial history, but it would also be one of the most expensive adult educations in the world.
An education in a subject that is already on the syllabus in high school.
