Germany is known for many things—Beer, sausages, festivals featuring mainly beer and sausages, their directness, love of staring, weird sense of humor, recognizing Scientology as an abusive business operation and not a religion, and two world wars. OK, sure, that list is a bit hit or miss and there is a lot left out. But there were other things on the list Trump could have picked in that tweet. But he didn’t and we have to deal with that. Or maybe he just thinks if he completely ruins America, like Germany was twice, something better will stumble out of the ashes. But, as a so-called businessman, you would have thought he might have emulated their business and economic model. But that would have meant he actually wanted to make America great again and not just rip off Ronald Reagan’s slogan, “It’s morning in America.” With Trump, it’s more like “Mourning in America.”
Germany has the largest national economy in Europe and the fifth largest economy overall as measured by GDP (Gross Domestic Product ). Oh, and did you know that Germany is only the size of Montana with 25% of the population of the USA?
You might be thinking to yourself too, hey, how can a country that small and whose workers only work a measly 35 hours a week with a minimum of 24 paid vacation days be so economically strong when you, a hard-working American, are working at least 40 hours a week with minimum of 0 guaranteed paid vacation days?
The Mittelstand, that’s how.
Then-British Prime Minister Tony Blair asked Angela Merkel what the German’s economic secret was. Her response was, “Mr. Blair, we still make things.” Germany just doesn’t still make things. They make the things that make your things that were made in China.
What Merkel was referring to is the Mittelstand, the engine that drives the German economy. The Mittelstand refers to small and medium-sized enterprises in German-speaking countries with their main sectors in machinery, auto parts, and chemicals. They are typical family owned businesses with strong regional ties, customer focus, and a hatred of debt. These types of enterprises make up 99% of all German firms, hire about 80% of the German workforce, and account for 53% of the total economic output and 37% of overall turnover for German companies, or roughly 2 trillion Euros. And Germany exports more than the US, two-to-one.
Some of the various traits associated with Mittelstand firms are:
- Family ownership or family-like corporate culture
- Generational continuity
- Long-term focus
- Emotional attachment
- Investment into the workforce
- Lean hierarchies
- Customer focus
- Social responsibility
- Strong regional ties
- Hatred of debt
By the way, having legislation and unions to protect their workers also doesn’t hurt the economy, either.
Once such Mittelstand company is TRUMPF. Companies like Harley-Davidson and Apple buy their laser cutting machines. Around 8% of their revenues goes to Research and Development, and even more to their workforce, which they hire young. And when we say young, we mean workers old enough to be in the German equivalent of the 10th grade. These kids start with a 3-year apprenticeship that ends with a salaried job. Oh, and TRUMPF pays for their college education, too.
When TRUMPF’s sales took a nose dive in the 2008 financial crisis, 40% drop in sales in 2 years, they were faced with making cuts to production. In America and pretty much anywhere else in the world, this would have just meant drastic layoffs. But not for TRUMPF and other German Mittelstand companies. The President and Chairwoman of TRUMPF Nicola Leibinger-Kammüller considered the idea of laying off so many people terrible because it turns out they like their employees and they kind of need them to be in business. So TRUMPF turned to a German program called Kurzarbeit, where firms would reduce the hours worked rather than jobs and the government subsidized the wages. Which doesn’t sound all great but still better than being jobless. Now this might sound like another dirty liberal trick to get people sucking off of the government tit but it wasn’t. Kurzarbeit not only benefitted the workers but the companies as well. Mainly because workers were encouraged to improve their skills through further vocational training, such as qualifying as a Meister, or master in their specialty. And some Germans didn’t mind only earning 85% of their wages because of this program and their chance to become better at their jobs. TRUMPF saw a 50% growth within 1 year after the downturn and boasts that they carry no major debt.
Now you might be thinking, that’s too much of a pipe-dream for America. And you’re right. The Mittelstand model would be a great improvement and step forward for not only American companies but also workers… if only we weren’t so far down the capitalist rabbit hole. In America, American students, unlike our German counterparts, are encouraged to go the college route to find their riches instead of the vocational one, only to find out that their salaries will barely cover their student loans. And American businesses aren’t really in the market to pay Americans a living wage when across the border, or in a Chinese sweat shop like Ivanka Trump’s Xuankai Footwear, you can pay workers pennies on the dollar. So, maybe I got your hopes up a bit… But it is more likely that the only thing German that Trump might import to help America out is the beer General Mattis says we should use on suspected terrorists instead of torture. Because it sure as hell won’t be Corona.
The author will discuss this topic as a guest on this evening’s (2/13/17) edition of “Some Say” on fyiNation.com
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- How to Make America Great Again? Ask Germany! - February 12, 2017