1. Is Deutschland AG kaputt?
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CORPORATIONS , *INTERNATIONAL competition , *ECONOMIC expansion , *INDUSTRIES , *FOREIGN investments , *ECONOMIC development ,GERMAN economy, 1990- - Abstract
Since the post-unification boomlet ended in 1994, German economic growth has averaged only 1.6% a year, the lowest rate in the European Union. 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. 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. The Germans have been dismayed suddenly to find their firms vulnerable to hostile foreign raiders. A new era started in 1998 when Daimler-Benz bought Chrysler, and other examples of German firms "thinking big" and "going west". But the business climate has got tougher, and a few years on several of those other link-ups look less triumphant. One reason why Germany's biggest firms, such as Volkswagen AG, stand up to world competition is that they invariably have special deals to keep their workforces flexible. The country's Mittelstand of small and medium-sized firms enjoys less flexibility. 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.
- Published
- 2002