Germany doesn’t compete in cheap manufacturing, they compete in highly precise manufacturing. There are bunch of things that are only manufactured in Germany. You don’t hear those companies that much because they are not public but they are well known by the people who work in specific industries. When you combine them, they are way bigger than the German companies you hear everyday which are laying off people or closing factories.
For some reason, every time Europe is mentioned, there is always a comment about how Europe is struggling but when you look at the quality of life, happiness or life expectancy, all those numbers are higher than the US. People should stop obsessing with GDP.
> There are bunch of things that are only manufactured in Germany. You don’t hear those companies that much because they are not public but they are well known by the people who work in specific industries.
There is small town of 35,000 inhabitants around the corner from where I live. It produces 50% of the world's surgical equipment, from a base of around 600 companies.
There are good reasons why "made in Germany" is not as dead as some people want us to believe.
A common talking point is that the number of people working in engineering is decreasing over time. The implication is that "we are making less", but the real story is that "we are making things more efficiently".
A case in point is agriculture in Australia, where a crop farm might be as big as a thousand acres, whereas its common in SEA for a family to have just one or two acres. The huge scale is enabled by multi-million dollar tractors, drones, huge irrigation systems, etc...
Google says that the average farm size in Australia is 10,000 acres. I didn't think they were significantly smaller than the farms in Saskatchewan Canada which average 2,000 acres.
1000 acres i too small to be economic as a wheat producer in Saskatchewan, Canada. I suspect it's the same in Australia. Definitely cannot support multi-million dollar tractors or combine harvesters.
The rule of thumb in Saskatchewan is about 10,000 acres per employee. There are lots of farms with less than 10,000 acres, but they generally don't have employees.
1000 acres - for crop, typically located in our hot and dry areas - is a hobby farm. 1000 acres in the wetter and greener areas running dairy cattle could be more commercial (but I lack experience there). The people I know running commercial farms are 10,000+ hectares.
What pulls up the average would be our cattle stations (ranches for the Americans) if they count as farms. These are huge - eg. Big ones 2-6 million acres.
I know many of these companies and I have even been invited to some of them.
I am not some American desperate to insult Europeans. I am a German, I work in the German industry, my livelihood depends on this economy.
>When you combine them, they are way bigger than the German companies you hear everyday which are laying off people or closing factories.
This plainly is not true. Even the "small champions" are struggling, because they are mostly suppliers to the large companies. A very significant part of the "Mittelstand" exists as specialized suppliers to the German car, Aerospace and Railway companies. If those are struggling, then the suppliers feel the pain just as much.
I am not German, but I live in Germany and things can be debated in detail and from various viewpoints. Things are rarely black and white.
But I am getting kind of tired of the canned half informed opinions like "outrageous energy prices" usually although not always followed by "closing cheap nuclear will do that for you". Energy like natural gas is still elevated compared to 2021 but it's nowhere near outrageous anymore. Electricity as an end consumer I can now get cheaper than in e.g. France, and they just announced dirt cheap industry prices etc. So things can be complex, what was the case in 2023 might not be in 2025. Things change but it takes too much effort to question if what was true two years ago is still really true, so we are stuck with these lazy views.
I did not even mention energy prices in my post. But it is a basic truth that high energy prices reduce the competitiveness of industry.
>and they just announced dirt cheap industry prices
Any person who thinks that this is any more than a figleaf lacks basic economic understanding. Where does the German government get money? From German industry. The industry price is a tax break.
But you are also right, just continuously talking about the price of energy is another way to avoid talking about the structural issues. Lack of cost competitiveness does not just come from differences in the price of electricity.
The hard truth is that the Chinese are very good at manufacturing. Even for high quality products. For decades they have only gotten better and have taken over more and more industries, they did this by being cheaper and better, while also innovating. The future of the German industry depends on rising to that challenge and actually being able to stay better than the Chinese.
If you work somewhere in German industry, a phrase you are going to hear is "so haben wir das immer schon gemacht" (this is the way we have always done this) and you will find an institutional unwillingness, from the management down to the staff, to engage in radical change, to try new things and to embrace new technologies. This protects German industry from fads, which quickly fade, but it also means that it is always at risk of drastically falling behind when it comes to genuinely superior ways of working.
You didn't mention it, but it was mentioned somewhere else and is a typical response. My main point is that these things are complex and can't really be reduced to a simple sentence. As for the electricity itself, most countries have cheap electricity because of subsidies. The issue with German "high" electricity price was never that it was truly high, it was that the actual cost was on the actual bill. This is typically not true.
I don't work in the industry, but I agree with this assessment. I don't want to reduce all Germans to a stereotype, but I agree there is just a lot of inertia and being successful because it used to be successful. Like e.g. Intel, and it will eventually run out. The whole Europe reminds of the tired part in that wired vs tired meme. People live a good life, which is good, but it makes them want to strive to preserve that. So no wonder they trust their fortunes to someone like Friedrich Merz, a bean counter, whose biggest accomplishment in life was that he submitted a tax report on a "Bierdeckel". That's not the way to go forward.
One of the last worldwide relevant things coming out of Germany was the Energiewende, yet many people outright reject it because it interferes with their comfort and the way it used to be done. But in reality either by luck or genius, completely nailed it and was the first in creating a completely new world. But then nothing.
The Energiewende was a total failure and a complete disaster for Germany. People often make this discussions about renewables vs. fossil energy sources, but this is totally misleading.
The Energiewende was completely mismanaged and if you have any inclination towards renewables you should hate the German government for it. Here are the mistakes:
- The German government only subsidized renewable production, by guaranteeing a fixed price. This means that energy storage was completely neglected, leading to very high fluctuations in energy price. German industry had to adapt, by only operating under certain wind/sun conditions.
- They sold out their key renewable energy manufacturing to China. One would think that it would be prudent to keep solar panel production in Germany at all cost, when you are betting your future on it. But apparently nobody was concerned to sell it out to China. The same goes for letting Windturbine manufacturers go bankrupt.
- Prematurely shutting down nuclear. The loss of the nuclear plants meant that on-demand energy generation became more difficult. Further increasing problems with energy prices during periods of darkness and little sun.
I am not against Germany relying on renewables. To be honest I think it is a good thing for multiple reasons, among them is also the fact, that it gives Germany further autonomy from importing fossil fuels from either the US or Russia. But the way this transition was performed was a total failure. The people responsible either lacked basic understanding or willfully ignored them. Attributing recent economic hardship to the Energiewende is true to some part, but the real cause is a persistent failure of politics.
The Energiewende is a total success on a global scale, a beacon of hope for the entire world, something Germans can be proud of. They did something, told the entire world "this is the way" and the entire world followed. Nuclear energy and whether it was retired prematurely or not is nothing more than a wet fart, a banal point of contention, a premature optimization and thus root of all evil. Big problems were solved, and in a few years nobody will remember minor decisions. Energy storage being neglected didn't change anything because as we see now it's now accelerating because there is so much free electricity. Solar panels can still be made outside of China, that they are being built there is a consequence of living in a market economy, and they are just better at it currently. I thought gaining these efficiencies was the point of a free market. But again, there is no real secret knowledge in making them, so if need be they can be made domestically. Whether by chance or planned, Germany hit the nail squarely on the head.
> you are going to hear is "so haben wir das immer schon gemacht" (this is the way we have always done this) and you will find an institutional unwillingness, from the management down to the staff, to engage in radical change,
And, besides this, Germans _love_ bureaucracy. Processes always get more complicated (any "improvment" is an addition to the existing process)
There is not a single German I have ever met with enjoyed bureaucracy. The government just loves micromanagement and the population has to interact with that.
In companies bureaucracies exist so that managers can evade the responsibility of making decisions and employees can evade doing anything but sitting in boring meetings. Nobody wants this.
How does someone get money to pay income or sales tax with? Exactly, from his job, what are the high paying jobs in Germany? Exactly, the German industry.
The German industry has been a decade long wealth generator. For the citizens of Germany and the government.
certain people want the rest of the world to become like china and india, top down sweatshops so they can squeeze just a little more dollar out of people
No, GDP is a necessary but not sufficient condition for lavish government services. Yes, there are ways to juice GDP figures without actually having a functioning economy that can support lavish government services, but if your GDP is flat or declining, there's no way you'll be able to continue affording lavish government services.
You can make debt, as many governments have been doing until now...
And debt (spending) ironically will increase the GDP.
If a company keeps on producing goods and doesn't sell them? That increases also the GDP. ( as long as they don't throw them away )
If a government makes debt to buy weapons and increase the army? Look at the Russian +4% GDP just because of that. However, how sustainable is that? The GDP doesn't care at all about that.
The GDP doesn't provide the full picture of how a country is doing economically, but it's good to have a first overview to later do a deep dive into, but so are other "tools".
It's an old tool created 100 years ago, and we keep on using it although the world has changed drastically since then.
Even those companies are struggling nowadays with quality of goods made in China improving extremely fast.
> For some reason, every time Europe is mentioned, there is always a comment about how Europe is struggling but when you look at the quality of life, happiness or life expectancy, all those numbers are higher than the US.
But quality of life in Europe is decreasing fast. Pension is becoming unsustainable. Govts are going bankrupt. Infrastructure is collapsing. People correctly see that Europe as a whole will fall behind in some years unless things change
They might not be "going bankrupt" in the sense that they're imminently going to default on their debts, but debts have reached unprecedented levels[1], and show no signs of stopping. If you know someone who's racking up serious amounts of debt on sports gambling or whatever, it's safe to characterize that as "going bankrupt", even if you think they'll be able to make the minimum payments on their credit cards for the next few months.
>Volkswagen payed 4.5 billion in dividends in 2024
German industry also provides millions of high paying jobs to German citizens. In the last decades a career in any of these companies meant guaranteed financial stability to each of the employees.
The "downside" of having good paying, high quality, stable jobs is the existence of billionaires. The narcissistic complaint that billionaires should not exist, when their existence is just the direct consequence of having a functioning economy is so absurd. What matters is whether these companies are good for the population, which they are.
By the way, guess where a significant part of that 4.5 billion went? And not just as taxes.
Completely false. The jobs have not changed at all, the companies have no actual ability to do so. Especially not Volkswagen.
Americans hear "layoffs" and think it means people getting fired and walked out of buildings 30 minutes later. The reality of layoffs at Volkswagen is that people in their late 50s and 60s were asked whether they wanted to retire early. Staff were offered up to hundreds of thousands of Euros to voluntarily leave.
> The "downside" of having good paying, high quality, stable jobs is the existence of billionaires.
This correlation doesn’t exist.
Billionaires also exist where people have low paid, low quality jobs.
Often the billionaires are also shareholders of those companies.
So while they paid billions in dividends they also said the job guarantees are gone because 5 billions are missing.
It weren’t the workers who botched the development of new series but neither the management nor the shareholders feel the consequences.
And it isn’t only VW. Also BMW and Mercedes.
Right wing parties often complain about social security payments as unearned income, what are dividends and why do the shareholders pay less taxes on that income as the workers who actually build the products?
Billionaires are a symptom of a skewed economy where one side gets more and more of the wealth while the middle class is told it’s because of the lower class, unemployed and refugees
For some reason, every time Europe is mentioned, there is always a comment about how Europe is struggling but when you look at the quality of life, happiness or life expectancy, all those numbers are higher than the US. People should stop obsessing with GDP.