Re: Der Economist über Deutschland - Artikelserie (2)

verfasst von Popeye, 06.12.2002, 09:33

-->Is Deutschland AG
kaputt?
Dec 5th 2002
From The Economist print edition


What's ailing German industry

CAN this really be the country of the
Wirtschaftswunder-the economic miracle that
brought burgeoning growth to Germany from the end
of the second world war to the mid-1980s? Since the
post-unification boomlet ended in 1994, growth has
averaged only 1.6% a year, the lowest rate in the
European Union; this year, says Wolfgang Clement,
the new economics minister, the figure may be only
0.5%; some government advisers predict even less.
Foreign direct investment into Germany has been
paltry, and virtually all of Germany's biggest firms are
setting up plants abroad to make products more
cheaply. Bankruptcies this year are a third up even on
last year's record.

[img][/img]
The hourly cost of
labour in
manufacturing industry
in western Germany,
including wages,
social-security
(including health) and
pension contributions,
is 13% more than in
America, 43% more
than in Britain and
59% more than in
Spain, according to
the US Bureau of
Labour Statistics (see
chart 3). Yet
Germany's once-admired productivity no longer
outstrips its main rivals'. And although Germany has
increased its exports (and is still the world's
second-biggest exporter), those of other countries
have grown faster. Its global share has dipped from
11.8% in 1992 to an estimated 9.7% in 2002.

When Germany agreed to swap its cherished D-mark
for the euro, it hoped that the move would do its
financial markets a power of good. It didn't. Indeed,
the country's banking system is now in crisis. In the
past few months, Deutsche Bank and Dresdner Bank
have announced lay-offs, of 14,500 and 11,000
people respectively. HypoVereinsbank, Germany's
second-biggest bank, has watched its profits dwindle
and expects to make loan-loss provisions of euro3.3
billion for this year. Rumours of a liquidity problem
have swirled around Commerzbank.

A merger between Deutsche and Dresdner failed
miserably two years ago, and the marriage of
Dresdner to Allianz, a Munich-based insurer, has been
a flop. Plans two years ago for Deutsche Börse, which
runs Frankfurt's stockmarket, to take over the London
Stock Exchange ended in a mess, and Frankfurt's
Neuer Markt for high-tech shares is to close soon
after less than six years in business. Talk of Frankfurt
taking over from the City of London as the hub of
European finance has evaporated. Investment
banking, in particular, has floundered as its big banks
have failed to consolidate or expand."We completely
missed the boat," says a leading Frankfurt
investment banker.

The Germans have been dismayed suddenly to find
their firms vulnerable to hostile foreign raiders. The
takeover two years ago of Mannesmann, an
engineering-cum-mobile-phone giant, by a British
firm, Vodafone AirTouch (as it was then called), was
a heavy psychological blow to German corporate
pride. Mr Schröder at first tried to resist the takeover
but eventually accepted the inevitable."Goodbye,
Germany AG," said Rolf Breuer, then head of
Deutsche Bank.


Bestriding the world or doing the splits?

Two years ago, a German business journalist, Werner
Meyer-Larsen, wrote a book called"Germany Inc: The
New German Juggernaut and its Challenge to World
Business". A new era, he wrote, had started in 1998
when Daimler-Benz bought America's Chrysler, and he
cited a number of other examples of German firms
"thinking big" and"going west".

Deutsche Bank bought New York's Bankers Trust.
Bertelsmann, a German publisher, bought Random
House, the biggest American book-producer.
Holtzbrinck, the owner of some weighty newspapers,
bought three leading American publishers. Hoechst, a
Frankfurt chemicals company, teamed up with a big
American rival, Marion Merrill Dow, before merging
with its biggest French one, Rhône-Poulenc, to
become Aventis. Munich-based Allianz, Europe's
biggest insurance company, had already bought
America's Fireman's Fund. And Europe's Airbus, in
which DaimlerChrysler's subsidiary, DASA, is a
partner, had become Boeing's biggest competitor.

But Mr Meyer-Larsen
may have got a little
carried away. For
sure, the
DaimlerChrysler deal
marked a striking
international advance
for German business.
Daimler-Benz's boss,
Jürgen Schrempp, the
nearest thing to a
business hero in
Germany, seemed to
be working wonders.
But the business climate has got tougher, and a few
years on several of those other link-ups look less
triumphant.

In any event, many of Germany's firms remain small
by international standards. Of the world's biggest 500
companies in market capitalisation, 238 are
American, 50 Japanese, 36 British, 29 French and only
21 German.

One reason why Germany's biggest firms, such as
VW, stand up to world competition is that they
invariably have special deals to keep their workforces
flexible. For example, the number of hours worked at
Wolfsburg, VW's biggest plant, which employs over
50,000 workers, varies hugely according to the state
of the market. At VW and elsewhere, millions of
workers, in return for a shorter average working week,
have been moving to new systems of"task
fulfilment" rather than having to work a certain
number of hours.


Mittelstand mutterings

The country's Mittelstand of small and medium-sized
firms enjoys less flexibility. Many of these firms
would love wage bargaining to be done at company
level, not-as is usual-in nationwide bargaining with
one of the giant trade unions. But most of the
leeway, they feel, is on the other side. For instance,
it is easy for workers to report sick, and they often
do. The director of one chamber of commerce notes
wrily that illness strikes selectively: 70% of the time,
he says, on a Monday or a Friday. When workers are
sick, they get full pay for six weeks. Mittelstand
managers suggest that sick pay should start at 80%
of the full wage, and drop with a prolonged absence.

Another source of irritation is the right of any
employee to move from full- to part-time
employment, whether it suits the employer or not.
This discourages firms from hiring young women who
might suddenly demand time off to look after a baby.
Such provisions hit smaller companies much harder
than big ones.

Yet another Mittelstand gripe is that Germany's high
income-tax rates hurt the Mittelstand more than
bigger firms because, being almost all family- or
trust-owned, they tend to distribute profits in the
form of higher pay. Mr Schröder's cut in corporation
tax was more generous than that in income tax-yet
another reason why many Mittelstanders complain
that the chancellor is friendly to big business but
instinctively hostile to smaller capitalists like
themselves.

Another big Mittelstand headache is raising credit.
The big banks, they say, are unhelpful. The banks
deny this, but the sort of Mittelstand companies they
deal with tend to be at the top end of the scale. A
score of companies that arguably qualify for the
Mittelstand category (because they are unlisted, and
owned by families or foundations) have a turnover
that exceeds euro1 billion. These substantial
Mittelstand companies include such famous names as
Miele (white goods), Behr (air conditioners), Stihl
(chainsaws) and Trumpf (laser-cutters), which each
have a turnover of between euro1 billion and euro2
billion and employ between 5,000 and 15,000 people.
It is further down the ladder that Germany's banking
system is proving inadequate to satisfy the
Mittelstand's thirst for credit.

Germans who prefer to be self-employed so that they
can avoid paying salaried workers' full social-security
contributions also complain that the dice are loaded
against them. For example, lorry drivers who work on
contract for a single company have been told that
under new rules they count as part of the firm for
which they deliver, adding 41% to the cost of
employing them. As a result, a lot of freelance Polish
truckers are now distributing goods at a cheaper rate,
taking jobs from their German counterparts. In a
similar vein, the director of Hanover's chamber of
industry and commerce, Wilfried Prewo, points out
how much harder it is to become a taxi-driver in
Germany than, say, in the United States."Our logic is
that you must always, if possible, be an employee,"
he sighs.

Berthold Leibinger, the doyen of Trumpf, a classic
Mittelstand firm based in Stuttgart, is another critic
of restrictions that hamper entrepreneurship."The
Social Democrats don't understand the role and
importance of the Mittelstand," he says."They're not
pragmatic." They're particularly hostile, he says, to
people who inherited their firms."We've become a
safety-crazy nation," he says."We need to be more
risk-minded. It's unbelievable that in two generations
we've moved from a country that wanted to cover the
world [in business] to one that is afraid of itself."

According to an old joke among Mittelstanders, Bill
Gates could not have made his fortune in Germany
because it is illegal to turn a garage without a
window into an office. Ah well, the jest goes on, Mr
Gates would at least have ended up as a senior
manager in a big corporation. But no: large German
companies rarely give good jobs to university
drop-outs.


Old-fashioned virtues

With so much to complain about, how do so many
German firms still manage to do so well? The answer
lies in good old-fashioned hard work, efficiency,
attention to detail and precision, pride and high
standards, particularly in engineering. In that
respect, another part of the corporate tradition of
German business, the apprentice system, still works
well: newcomers join firms at token pay, usually for
three-and-a-half years, and spend a day or more a
week undergoing formal training elsewhere at the
expense of the state-and then, if the firm likes
them, join as full-fledged and often very loyal staff
members.

Many leading businessmen-including Josef
Ackermann, the (Swiss) new Deutsche Bank boss,
Paul Achleitner, Allianz's (Austrian) chief financial
officer, and Gerhard Cromme, head of ThyssenKrupp's
supervisory board-are known to be frustrated by the
German economy's over-regulation. Their calls for a
less restrictive regime may gradually be heard. Many
of the new wave of Germany's top businessmen have
had experience in the United States, and feel that
degrees in business management (such as those now
offered by the Stuttgart Institute of Management and
Technology, and by the European School of
Management and Technology founded in Berlin in
October) should be much more widely available in
Germany.

"For the past ten years we haven't been moving,"
says Hans-Olaf Henkel, a former head of IBM in
Germany and for a time a notably outspoken head of
the Federation of German Industry (BDI). Like other
go-ahead businessmen, he recites a litany of
measures that would help to free the economy but
concludes gloomily:"The political will just isn't
there."
Quelle: Economist vom 6.12.02 (nur Abo)

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gesamter Thread:

• Der Economist über Deutschland - Artikelserie (1) - Popeye, 06.12.2002, 09:29
  • Re: Der Economist über Deutschland - Artikelserie (2) - Popeye, 06.12.2002, 09:33
    • Re: Der Economist über Deutschland - Artikelserie (3) - Popeye, 06.12.2002, 09:42
      • Britische Kapitalisten sagen aller Welt, wo's lang geht? LOL! (owT) - Wal Buchenberg, 06.12.2002, 10:08
        • auch so mancher deutsche Marx-Fan versucht das gelegentlich ;-) owT - silvereagle, 06.12.2002, 10:13
          • @silvereagle, der unabhängige Kopf - Wal Buchenberg, 06.12.2002, 12:04
            • Take it easy, Wal - silvereagle, 06.12.2002, 13:20
        • Gestern seltsame Pressekonferenz des Economist in Berlin - El Sheik, 06.12.2002, 10:25
      • Re: Der Economist über Deutschland - Artikelserie (4) Mit Anhang für @Wal B. - Popeye, 06.12.2002, 10:40