In response to the “destabilization of the world.”
About 20 German industry chieftains, rattled by the hits German companies have recently taken, including Deutsche Bank and Volkswagen, spent Saturday and Sunday two weeks ago on the phone with each other. They were fretting about the future of Germany’s export-dependent industry and outlining solutions. Some of the participants have since talked to the German daily, Die Welt, which published its report on Sunday.
Participants included Siemens CEO Joe Kaeser, BASF CEO Kurt Bock, Deutsche Bank CEO John Cryan, BDI (Association of German Industry) president Ulrich Grillo, and BDI General Manager Markus Kerber.
How to protect key industries in Germany is also topic of a paper being worked on by the Economy Minister Sigmar Gabriel and his folks, the Welt reported. They’re searching for “protective walls,” and are working on a “list of options for actions to protect key German industries.” Finance Minister Wolfgang Schäuble and State Secretary at the Finance Ministry Thomas Steffen are in on it.
For months, top executives and politicians have been discussing the impact of foreign governments on the “pillars of the German economy.” The recent “re-nationalization” of economic policies in many countries, in parallel with the “destabilization of the world,” scares these managers.
“We are in a new phase in global politics, in which many countries are reverting to their national interests, where globalization is being turned back,” Kerber explained. Other executives have used similar words in their confidential conversations.
Everyone is looking for answers. Nothing has been decided. Solutions are being worked on “behind the scenes.” And it shows, the Welt said, that “protectionism is suddenly no longer a dirty word” in business and politics.
These four events shook up German industry leaders:
- Deutsche Bank’s potential fine of $14 billion that the US Justice Department has proposed to settle allegations concerning mortgaged backed securities sold before the Financial Crisis by its US unit. The largest US banks have already settled, and Deutsche Bank’s fine won’t be the largest one.
- Volkswagen’s nightmarish legal situation in the US, and to a lesser extent in other countries, after having gotten caught in a monster fraud case that has become known as dieselgate.
- The acquisition of German robotics darling Kuka by the Chinese firm Midea.
- The proposed acquisition of lighting specialist Osram by Chinese firm San’an Optoelectronics.
In the first two instances, the tycoons fear foreign governments’ reach into their home base, and suddenly they feel vulnerable, after their enterprises had committed those acts of deception and fraud for years overseas. They want to defend their enterprises and the economy against this.
And in the instances of acquisitions, the tycoons want reciprocity.
“Germany is in a phase where it has to once again act with more self-confidence,” BDI’s Kerber told the Welt. “We’re demanding reciprocity from countries like China. If the Chinese want to buy German high-tech firms like Kuka or Osram, then Germans must be able to completely take over Chinese enterprises too.”
But relations with China are getting increasingly difficult, these executives said.
Major foreign firms cannot start their own subsidiaries in China but have to do it with local partners in joint ventures, often requiring technology transfer. And foreign firms cannot take over Chinese firms; they’re only allowed to buy stakes in them.
One of the proposals is that the government would have the right to forbid the sale of companies once a buyer obtains more than 25% of the voting shares. A government veto would be justified when a large state, such as China, is somehow involved in the transaction.
Germany’s export-oriented economy perhaps depends more than any other on globalization. And so these business leaders are watching with deep concern the national efforts by many other countries.
“The German economy has about one trillion euros in overseas assets in the fire,” Kerber told the Welt. “We have to take care of that.” The solution is in a stronger cooperation between the political powers and business leaders, he said. “The times when politics could do without business, and when business could do without politics are over.”
“We Germans must focus on the interests of our industry,” Kerber said, adding that Deutsche Bank, as biggest bank in Germany, is an example.
In those phone calls on Saturday and Sunday two weeks ago, the business leaders struggled with a delicate topic: Does the German economy still need Deutsche Bank? And if yes, how could they support the teetering bank? Is there even any will to do this?
“Everyone agreed that we have to support the bank in an emergency,” one of the participants told the Welt. So among these executives there was a consensus to help the bank with a declaration of confidence – not surprisingly, we’ve since heard plenty of such “declarations of confidence.”
And if that doesn’t work they’d even help the bank with money, such as an equity stake – which raises an intriguing question: Would they borrow those billions at negative interest rates from Deutsche Bank and use the funds to acquire the new shares Deutsche Bank would sell? The Welt didn’t say. But it would be a nifty idea.
To defend against foreign governments’ attempts on their companies, some CEOs want the “conceptual revival of Deutschland AG” (Germany Inc.).
Deutschland AG was the tightly woven network of banks, insurance companies, and industrial companies in the second half of the 20th century, marked by cross-shareholdings and shared board members. The network was largely disentangled in the 1990s.
Many of the companies won’t confirm these conversations, and some are denying them, according to the Welt. But the idea of greater and tighter industrial and political networks and mutual solidarity against the outside world, particularly US government intrusion and Chinese lopsided aggression find a lot of support.
A “structural change” is taking place in China: capital flight in yuan. Read… What the Heck’s Going on with the New Global Reserve Currency, the Chinese Yuan?
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It sounds like now that globalization is threatening their positions, it’s a bad thing.
“It sounds like now that globalization is threatening their positions, it’s a bad thing.”
It is not Globalization that is threatening them, it is the economic warfare being waged on them by china.
A state owned or supported chinese company, can buy 100% of a German company, but a Germany can not buy 100% of a mainland chinese company.
You seem to have missed that point.
It is not globalization when the rules are different, in different state’s, for the same action.
The globalization playing field, is, and always has been, heavily tilted in chinas favor.
This must be changed.
Or globalization must be unwound, which is really very easy, and probably easier, than making china play on a level field.
d – not really.
Anyone else is free to buy Kuka at 30% over book, but hasn’t, including their pretty wealthy owners. Kuka’s financials are a mess, look at the stock dive after the offer. What Midea needs to do is rationalize production to put some free cash flow into it. IE get rid of a very expensive labor and production system. It’s better for them to close the plants and move, keep the IP in Germany.
Other potential buyers just don’t have that long term time frame to want to make the change happen, or don’t see the long term value creation. Robotics is neat, but not a profit machine.
And can anyone pls tell me which Chinese company one WOULD want to buy?? None, that I can see. You have no idea what you are buying. Who cares about not being able to buy a Chinese state-owned. Why would anyone, especially these days.
“And can anyone pls tell me which Chinese company one WOULD want to buy?? None, that I can see. You have no idea what you are buying. Who cares about not being able to buy a Chinese state-owned. Why would anyone, especially these days.”
You are glossing the point if you found one YOU CANT BUY IT but they can come to your country and buy up technology by overpaying, and that is wrong.
“Would they borrow those billions at negative interest rates from Deutsche Bank and use the funds to acquire the new shares Deutsche Bank would sell? The Welt didn’t say. But it would be a nifty idea.”
That is just slightly illegal.
Daimler issues €1 billion in bonds for “investment in plant and equipment and general corporate purposes.” Then goes to DB to borrow €1 billion ostensibly to redeem $1 billion in maturing bonds. Now €2 billion slush around in its bank accounts and short-term investments. Then it redeems bonds as they come due and buys DB shares, maybe along with some shares of Commerzbank….
No one would even care.
The perfect financial transaction for our (benighted) times, buying and selling nothing to yourself w/ money you have borrowed from yourself.
What was it Walter Bagehot said about credit? When you must prove it is good your credit is in fact gone?
A Slight of hand like that would cover it.
Unless some competition regulators looked really hard as the Eu/ECB wont.
As both you and I would be ignored.
Gosh…In case you had Not Noticed…Slightly ILLEGAL has been Running MOST of the World for years…!!???!!! lolololol
Exactly! Global trade is just a slightly more civilized version of a street fight.
You got a laugh out of it ,this is good.
“Slightly” Is a deliberate understatement.
Every time the Chinese have bought in Canada they’ve overpaid. Every time the government got involved to stop deal it cost Canadians money.
The absolute poster child wasn’t even a Chinese company- the federal government and Sask prov govt together nixed an Australian mining giant buy of Potash Corp.
What- the nefarious ozzies are going to move the f&cking mine?
And they’d committed to leaving all employees in place.
Then US Lowes tried to buy Quebec based Rona- got nixed. Rona get’s in trouble (the Nanaimo store rivaled Target) and Lowes saves it anyway- at a much lower price.
I think the Potash deal was at about 200 a share- now its 50 or something. Multi-billion dollar hit for Canadian Mutual Funds and pensions.
I have no doubt Kuka robotics was shopped around in Germany before being unloaded on Chinese. Most likely reason- robotics isn’t meeting its ultra-hyped promise, and even at that what unique IP did it have?
My overall point is that it doesn’t make sense for the world’s number one exporter to start sounding protectionist.
So what is going on? I think here we have Deutschland Inc. rattling its saber, most likely in defense of VW- one of the principal drivers behind the German economic miracle recovery from WWII.
California has always had the toughest emission controls- but the bureaucrats demanding them didn’t realize that the law of diminishing returns applies everywhere. It may not have been possible to meet the latest squeeze.
And parenthetically, why should we test percentage of pollutants instead of amounts? A four cylinder car is already putting out half the gasses of a V8.
I don’t think the real target is China I think it’s the same country that
brought in the protectionist Smoot- Hawley tariffs around 1930- USA.
The ones that virtually all tenured economists advised against-
(about 1100 signed a letter to New York Times) but populists, labor and Joe Six Pack approved)
Result- the Depression.
“I have no doubt Kuka robotics was shopped around in Germany before being unloaded on Chinese. Most likely reason- robotics isn’t meeting its ultra-hyped promise, and even at that what unique IP did it have? ”
They make among the best robots in the world, the price offered by the chinese kept on going up, as Germans expressed interest.
chinese with state support, can do this, as the state simply prints the CNY to buy with.
That deal also isn’t done and dusted, yet.
Germany exports quality, however it is still an export based economy, faced with an uneven global playing field, and growing protectionism which is not aimed at it, but will damage it anyway.
Should Brexit occur. Germany is the remaining EU nation whose trade will pay the price, as its largest close market, with good margins, is England. The Corbynites cant wait to slap massive duties/tarrifs, on EU produced vehicles.
The Globalised Vampire Corporates allied with china have abused the globalization system, that was supposed to raise the lowest boats first.
To raise themselves and china over everybody, at everybody elses expense. Destroying the Western middle class, and driving most of the lowest boats LOWER, in the process..
Protectionism in the west will rise, and rule, as the people want their job’s back. They wont get them, but they will hurt the Globalised Vampire Corporates and china, Germany will be Collateral damage in this.
Sanders, Trump, Corbyn, the radicals in france, and Germany, are all singing the same song. Give us back our job’s.
The Globalised Vampire Corporates allied with china, will pay the price. Along with a lot of others, as ultimately they have no will to, and anyway can not, give back the stolen job’s. As it will effect their profits and all they care about, is their profits.
Yup, the pendulum is swinging back. The credit explosion was only delaying the inevitable but we are now at the last mile of that scheme. HP, IBM, Dell, Apple, Intel eliminated hundreds of thousands of local jobs while at the same time, opened campuses and R&D centers abroad and requested thousands of H-1Bs. Leveling the playing field for the developing countries, racing to the bottom for the developed ones; acquisitions for the former, dispossession for the latter. Protectionism, xenophobia, social unrest, increased abuse of power, emergence of fascism, etc., are simply predictable elements of this play.
If Kuka robotics isn’t up among the worlds best then look up what is building Tesla cars.
You can thank the US FED for this acquisition. By printing trillions of dollars to buy treasuries, they devalued the Chinese treasury holdings. Where else could they go but convert paper into tangible assets – at any price.
The Germans are going to have to bite the bullet, and withdraw from the US market. Doing business in the US is like doing business with the mob, they always want more, and if you don’t comply, the heavies pay you a visit.
Agreed. IMO this is the fading bankrupt hegemon trying to kneecap a major competitor via the “world’s policeman complex.” I own both 2 and 3 liter VW diesels. The US reaction has been hysterical to the VW “cheating.” These are still far cleaner than American cars and diesels, despite the NoX portion. The righteous indignation here–far more histrionic than in environmentally conscious Europe itself–is total hypocrisy. US/Japan partnership can’t compete in diesel (but can in hybrid) so diesel had to be killed. Hopefully Germans are waking up to the tricks of their overlords. They are the key piece in the balance of power, which itself determines peace or war.
I reckon that the real reason why VW is in trouble in the USA are:
– the lesser reason, they made US authorithies look stupid as the US authorities didn’t find out during all that time that VW did cheat
– the main reason, VW hasn’t greased wheels by contributing large amounts to the campaigns of US politicos, ie VW hasn’t paid protection money
I own a VW, and the consumption does not compare with other diesel guzzlers. There was an estimate of additional deaths from the NOx emissions; it was between 5 and 30/y in the US. In other words they are saying, we have absolutely no idea. You get a thousand times more deaths by eating at McDonalds, but is anybody trying to shut down McDonalds?
I’m surprised any authority would publish such an absurd stat- anyone with even a cursory knowledge of stats would know this number over 300 million plus is meaningless.
You run into some crazy stats with people who apparently missed measurements and tolerances in high school.
It’s bad enough when the IMF or a government says growth will be 2.4 % and then cuts it to 1.6% -meaning it shouldn’t be trying to specify growth to the nearest tenth of a percent.
But I’ve actually seen a forecast of 2.45 % growth somewhere about a country in South America.
Specifying growth, a future event, to one part in ten thousand!
More precise than the tolerance of a piston ring that’s laying on the counter, not somewhere in the future.
How could this happen?
Maybe like this: In pure math 1.4 X 1.4 is 1.96
But if the 2 numbers are the results of measurements, it isn’t
because the 6 is parts per hundred but your inputs were only correct to the nearest tenth. The output can’t be more precise than the input. ( I think the answer here is 2.0)
Maybe some bureaucrat multiplied some numbers?
Saying growth will be 2.4 percent, but reserving the right to cut it by one percent is something like saying: I’ll meet you at 2:23 give or take half an hour.
They should know this pretty well. While VW mostly stayed out of the US markets, other luxury brands like BMW had a lot of legal problems based on product liability. Anyway, German CEOs should ask themselves who is to blame? I think the answer is obvious – it is Merkel and her bunch of right-wing CDU members. Instead of stayng pretty much neutral and remaining an honest broker, she aligned Germany with the US on most international matters. Some of her party associates are now more hawkish than the most harwkish American neocons. What has happened to “peace-loving” Germany? This is, of course, backfired. And while German exports are still growing in value, it is probably mostly exchange rate effect. And the Big Master overseas seems to be just beating Germans into total submission.
>>While VW mostly stayed out of the US markets, other luxury brands like BMW had a lot of legal problems based on product liability.
It’s because they were building unreliable cars.
– The first run of BMW V8’s brought over in the early 90’s needed 100% engine replacements. They didn’t test with US fuel and the sulfur content destroyed the cylinders in short order.
– The E36 BMW’s has numerous problems with the chassis tearing and control arms disconnecting from the suspension.
– The E46’s had rod bearing problems and vanos problems which destroyed the engines.
– The high pressure fuel pump fiasco in their turbo engines. Again they didn’t account for US fuel. People were going through 2-3 fuel pumps before the warranty was even up.
This is just a partial list too. The new i3 electric car has had several recalls because the motor mounts break and disable the car.
BMW’s are great cars if you don’t own them vary long. I’ve had one in the stable for the past 10 year (3-4 of them). Not a single one of them has made it through the warranty period without needing repairs at the dealer. Not one.
Trivia- I guess you know Bimmer almost went bust in the 1950’s. Then they came out with the Isetta bubble car, built under license from a Italian who was a fridge manufacturer.
It actually came in a one cylinder version, but apparently only the twin was really practical.
But each and every one came with a sun roof!
That’s how you escape if you rear- end someone and the only door, the front ‘bubble’ is jammed shut.
When Merkel shows up for an austerity meeting, maybe she should use one to set an example.
I want one but I’d rather have a Messerschmitt.
I rode in one of those in Austria when I was very young (5?). The front of the car served as the door. So when you opened it, the steering wheel moved with the door. It was pretty nifty engineering. I was impressed. There were three of us in it: my mother, the driver, and skinny little me. And man, it was PACKED!
But it was so impressive I remember it to this day. Also, in those days, it wasn’t exactly common for kids (or at least us) in that part of the world to sit inside a car. So that itself was pretty impressive.
VOLKSWAGEN OF AMERICA REPORTS MAY 2016 SALES RESULTS
Jun 1, 2016
May sales totaled 28,779 units
Best ever May for Tiguan, with 4,394 units, a 42.7 percent increase
Best ever May for Golf R, with 433 units, a 38.8 percent increase
Please. VW blatantly cheated to increase profits per car. They could have made a clean diesel like they claimed to but chose not to spend the money on urea injection because it was much cheaper to cheat. Mercedes diesels don’t have a problem passing.
The cheating software plus the incompetent EPA saved them billions. It wasn’t an oversight or mistake. It was a calculated attempt to thwart emissions regulations.
It’s no different than the mortgage lenders who cheated in the run-up to GFC in 2008. It’s exactly the same kind of bypass the rules corruption.
Interesting comment. Since the on board computer reports the readings, and other epa stuff is company reported, we don’t know if the Mercedes diesel passes or not, unless it has been independently tested and verified. I wonder also about the big truck engines made here in the US as well….
US truck engines made in the US do not have an EPA, problem but they are MASSIVE POLLUTERS.
The EPA regulations were written to protect US manufactured truck engines and US engine manufacturers in particular.
At idle US truck engines are cleaner than European engines so the EPA reg’s demand this. at HIGH RPM the US truck engines are gross Polluters and teh EPA allows this. At High rpm which is where they work all day European truck engines are much cleaner than US engines.
Europeans, Volvo in particular had much trouble for many years with the EPA idle regulation even though at ever other point inn the scale the Volvo engine was cleaner than all US made engines.
You still see VERY FEW US engine powered trucks on the road in europe as they do not pass euro emission regulation’s.
The EPA wrote diesel car regulations, again to keep European vehicles out of the US market.
VW simply did to the EPA what the EPA does to the European manufacturers.
Adjusted the results to suit themselves.
IN short yes US powered trucks in the US are filthy gross polluters and much dirtier than euro powered trucks.
I worked with both in the souther hemisphere.
The euro big truck is nice to work on, nice to drive, nice to ride in, low pollution out put, dosent have the huge horsepower of the US truck at high RPM.
The US truck is an agricultural, archaic, pig, horrible to work on, not nice to drive or ride in, High pollution output, huge horsepower. fares well in harsher conditions found in the Southern hemisphere and north America.
Down here there are two types of buyers of American truck’s.
Those that will work them in the harsh conditions to which they are suited. Who are not perturbed by their pollution levels.
Those buying penis extension’s.
The majority of the on highway users, are the extension buyers, they also tend to be the worst drivers and operators of truck’s.
Interestingly DAF truck’s are sold in America with kenworth badges on them as Paccar own both brand’s.
For decades Paccar suppressed the availability of DAF vehicles in the southern hemisphere, as they directly competed with, and outsold the north American brand’s Ugworthless, Intercrashnal, Etc..
The leaders of Germany’s industry can achieve nothing because the German government is entirely incompetent as demonstrated by the damage caused to German / Russian business relations by Merkel’s sanctions.
When one of your biggest trade partners is misbehaving on the world stage.
You have to endure some pain as well, when you act to display your displeasure with it. Which sometimes you simply have to do.
German industry understands this. The union’s dont like it, and are more vocal about it.
The German populist are abusing it.
Muttis big mistake, was her position on the illegal economic immigrants claiming to be “Asylum seekers”.
True asylum seekers should be completing their application to move forward in Turkey or North Africa.
Now thanks to the illegal immigrant mistake, and the Russian sanction’s combined, her possible forth term, is no longer a slam dunk.
Russia is playing the system it has mastered. keep the people focused on the confrontation with the outside enemy (They have created) and they will endure much hardship in their everyday economic lives inside Russia.
What industry is saying to merkel is “Time for some give, as you have had much take”
Simple solution. Stop running criminal enterprises like Volkswagen and Deutsche Bank. Problem solved.
One could say the same about GM and every bank on wall street in the US.
dosent even come close to resolving the underlying issues of protectionism in response to unworkable and unbalanced globalisation in its curent form.
@Gregg.
IOW G.Motors, W.Fargo & Chase are less criminal?
At least the German CEO’s seem to care about their country. I would imagine that Japanese and Chinese companies also think about long term, what’s best for their country, as they should. Can’t say the same for (what’s left of) US companies and their greedy CEO’s.
Brunch or housing. That is the question:
https://www.theguardian.com/commentisfree/2016/oct/17/baby-boomers-have-already-taken-all-the-houses-now-theyre-coming-for-our-brunch
Key question for Germany: How hard will EU leadership seek to punish the UK for Brexit? German CEOs must be shaking at the prospect of losing a huge market. Eighty percent of the vehicles sold in Britain are imports, many BMWs and Mercedes.
Nothing new really except China is the new villain. A few years ago Germans were wringing their hands over ‘private equity’ firms buying German companies. Economic nationalism is the only type of ‘nationalism’ Germans are allowed. Object to being ‘colonized’ by Muslims and the state brands you an extremist and don’t even think about having East Prussia returned!
If Germany wishes the U.S. government to stay out of their “business” then their business needs to be honest. Given that both their largest bank and largest manufacturing corporation have both been caught with their “hands in the cookie jar,” Germany’s biggest export to the U.S. seems to be corruption.
Pretty big(oted) of them.
Definition of STUPIDITY–The trade treaties that the US has made with the rest of the world
In 1985 the US trade balance with China was about zero..Since 2001 China has run ~$ 3,500,000,000,000 total trade surplus with the US.All in the name of free trade..This is free trade bastardized to an unbelievable degree.
Germany is exactly the same except the numbers are somewhat smaller.Since 2001 Germany has run a $768,000,000,000 total trade surplus with the US.
So with all of these dollars sloshing around the world is it any surprise that Chinese companies start buying up companies overseas.
It is time for the US to wake up although it already probable that it it is too late
Those who negotiated these deals are traitors and should be tried and executed.
TPP, etc were too little too late in trying to re-cage the Chinese tiger. There were plenty of genius economists and politicians who thought that opening up China would be such a good thing for all. They live in a world of abstractions and depersonalized data. Now there are 1B+ more people to compete in a race to the bottom.
Meanwhile, real live human beings are suffering through the policy decisions and are being told to not worry, or are just not being told much of anything, and certainly not the truth.
Are those cheaper products from WalMart, et al really worth emptying out small towns and ruining lives? Many residents feel that they are pawns in some crazy game started when Nixon went to China to combat the red menace, especially the USSR. They are living proof that the cure may be worse than the disease.
When Nixon stepped off the plane in China my reaction at the time was … it’s all over.
These trade treaties were done in the best interests of elite groups and now we’re supposed to believe they’re really concerned over the global climate change that resulted.
Has anyone noticed that 80% of the U.S. beer market is owned by AMBEV. They bought Budweiser awhile back and now they are buying SABMiller.
Thus the list of beers includes the Budweiser, Coors, Miller, Leinenkugel, Fosters, Corona brands.
https://en.wikipedia.org/wiki/AB_InBev_brands
https://en.wikipedia.org/wiki/SABMiller_brands
So will these beers now be labeled as imports?
Ones sold in US will mostly be made in US.
Leinenkugel’s ‘Original’ is a case study in modern beer business. If it is sold in bottles, it is brewed in Chippewa Falls WI, but in cans it is brewed at Miller’s factory in Milwaukee. These are not the same beers.
Even though the Leinenkugel brand was sold to SABMiller, the beers brewed at the Chippewa Falls plant are quite good.
Smoke belching volkswagens being pawned off as enviro-friendly scam, a bank that has negative value assets and no foreseeable future, on and on.
I’m not sure this country isn’t run by BS artists who’ve been pillaging southern Europe abd who knows where else for decades and conflicting in about every way with Germany’s past, present and stated direction?
China purchasing Kuka could be a non-kinetic military advantage by remotely shutting down or disrupting manufacturing plants. Can obtain engineering design on how to make products with the robots.
Bean counters think primarily about cost/profits and not national security or military strategy.
Or you could just buy a Kuka robot and reverse engineer it- no need to buy company.
Reverse engineer it. You get history.
Which is why china has stopped reverse engineering, and started stealing or buying the R&D sector with the company.
Misbehaving 1% complaining about other misbehaving 1%. Heck look at the following: “German Economy Minister Sigmar Gabriel accused Deutsche Bank (DBKGn.DE) on Sunday of blaming speculators for last week’s plunge in its share price when the bank had itself made speculation its business.”
As someone above pointed out, they certainly didn’t complain when it’s them doing the pillaging.
I was at a business meeting in Germany about 20 years ago. Afterwards, we went to a restaurant. An executive from the Maschinenbauindustrie (machinery manufacturing industry) stood up at the table and, beating on his chest with both fists, said: We are biggest; we are the best; no one in the world can make what we make: high efficiency machines without imperfections. The world must come to us. Then, everyone in the restaurant stood up and cheered and applauded.
20 years later, things have changed. The technological “edge” the Germans have enjoyed, is getting thinner. They still make the best machines – but, others can make the same machine with 90% efficiency and sell them for 25% less than the Germans. That is the problem, which Germany, Inc. has to contend with. And, no one has an answer.
The other problem is that Germany does not have the “muscle”. No military. No national currency. No leverage without Uncle Sam standing in the wings.
After the Germans have exported their last patent; and after the Germans have transferred their know-how overseas, then who needs Germany anymore.
I used to frequent a bar after work outside of Brussels along with some friends from various other places in Europe and the place was always cheery until a loud rude demanding carload of Germans dropped in, then you could cut the tension with a knife.
Maybe those Germans were headed for Brussels to schmooze a few politicos?
You should see the tension when a busload of young Aussies drops in.
Then there are the British soccer fans.
Aussies aren’t pretentious, authoritarian, stuffy and bossy though? Aussies seem like happy people to me.
Never thought I’d ever hear note of a buss load of them in Belgium.
Not in Belgium no- they are more likely to be found in their area, Thailand etc.
The world’s most famous travel writer Paul Theroux considers them among the worst young travel companions.
In note you have no comment about Brit soccer fans- at least Gerry will usually obey the law.
“Major foreign firms cannot start their own subsidiaries in China but have to do it with local partners in joint ventures, often requiring technology transfer.”
That road being the one US manufacturing has already taken. The quote in the Chinese Communist Party’s mind: “The Capitalists will sell us the rope with which we will hang them.”
“The Capitalists will sell us the rope with which we will hang their offspring.”
Good luck to the offspring, the world is so FOS now their only hope is luck.
TSLA will be killed by German auto manufacturing building an inferior product. Remember those uber-expensive Mercedes from the 90’s that rusted completely through in just a few salty winters? Wow!
Hmm…sounds like the pot is calling the kettle black. Oh well it all depends on whose ox is getting gored.
It’s humorous watching the German auto industry writhing in its death agonies, too bad it cannot die twice.
What will all those poor auto workers do after they’re laid off? I dunno, become farmers or jazz musicians … or, perhaps they can revive the Mighty Wehrmacht and by force of arms stuff German cars down the throats of the French or Italians … or the Spanish. Then again, maybe not, all the others are more broke than the Germans! The hapless Europeans squandered their wealth (credit) on non-remunerative cars.
Cars are the problem, more cars cannot be the cure.
That the car biz has remained alive as long as it has is remarkable, a testament to the willingness of people to buy a well-sold lie.
Keerist
Should we be concerned about the pending Monsanto merger???
Concerned yes.
For the buyer, Monsanto’s owners, are dumping their impending glysophate liabilities.
I’m not a Monsanto supporter by any means. However, the majority of all US farmers and farmers all over the world use their seed for crops and livestock. Monsanto was able to get away with whatever they wanted with lobbyist, moving former employees to powerful positions at USDA and a Supreme Court justice…but, we allowed it. Germany will control the food supply (if the pending acquisition is completed) until we create another corporate monster or allow farmers to own their own seed which seems unlikely. We need to keep Monsanto here in the US and demand our political representatives don’t allow them to monopolize the farming industry, poison us with GMOs, pesticides, etc., and pressure them to run a fair business. I know it sounds laughable but it is possible. Food and water are going to be serious concerns in the future…at least for those who don’t control it.
Monsanto can only get netter under German control.
You miss my point.
The owners of monsanto, are dumping it. before Glysophate becomes another agent orange, and it is proven monsanto knew.
So hence my concern for the buyer.
Effectively they are buying Phillip Morris, just before all the big tobacco lawsuits hit it.
Unless the Germans continue all of Monsantos competition restricting practices. Some of the Non GMO seed producers, may get a little more market share, which will be good for the health of the consumer.
My concern is Germany continues Monsanto’s competition restricting practices. Why else would Bayer want it with the potential legal issues?
“My concern is Germany continues Monsanto’s competition restricting practices. ”
As a German company Bayer – monsanto will not be able to behave any where near as badly as monsanto did.
Why do thwy want it.
Own the competitor and change its ways ,or see it in the hands of the chinese.
Gm has a place in Agriculture (Stock Feed) but not the place monsanto was putting it, or the way.
Monsanto also has a lot of old patents and products Bayer wants/could use from its roots as a petrochemical and plastics company.
Incidentally even then monsanto was a bad company to deal with.
The best think to do with a bad company like monsanto, is buy it up, strip it, and collapse it.
Bayer may be getting into the American, buy, load it with debt, cash and asset strip it, then bankrupt it game. Why not American’s do it to the rest of the world every day.
It’s called a corporate bleed out and under US Bankruptcy law is illegal. The bankruptcy courts are overloaded and fraud is rampant. The watchdog system is a local lawyer hired to oversee cases and is paid a small salary so the fraud investigation is not worth their time and effort. Middle class Americans are footing the bill for corporate fraud and the majority do not even understand how the system works. Until we accept responsibility for the system in place it will be impossible to change it.
” Until we accept responsibility for the system in place it will be impossible to change it.”
Welcome to the Choir.
change starts with either term limits, or campaign funding reform.
Probably the former would be easier to pass as the thin end.
Citizens need to call and write letters to their Congressman demanding a legislature bill mandating government funding (with a cap) for all local, state and federal campaigns (plus making it illegal for any other type of campaign donations). Citizens must commit to not voting for their congressman in the next election if the bill is not passed and to finding another candidate to run in the upcoming election. This is a start and citizens in each state can demand it on principle and not by party affiliation.
Cry me a river. When people lost their jobs to cheap Chinese factories and complained that it was unfair to have to compete against their lax environmental and labor laws, globalists like these CEOs shrugged their shoulders and said we would somehow benefit in the end.
Now that what is being outsourced is German management rather than the workers and suddenly they cry about an unfair playing field? Please. Does the theory of comparative advantage not work when it comes to CEOs and capital structures? Chinese CEOs earn a fraction of Western CEOs. Sounds like the Invisible Hand is working fine. Maybe we can set up retraining centers for those outsourced CEOs so they can become day laborers at 1/1000th their salary. Surely we can’t impede the progress of free trade!
Why is it that trade treaties that protect western labor and the environment are labeled protectionist, but ones that protect IP and western capital structures are labeled free trade? Utter hypocrisy…
Oh yes, and for all those CEOs complaining about the justice Dept. Fining DB: I got an idea, how about you stop breaking the law? And if that’s too much, I’ll gladly forgo the fine if DB returns every dollar in stealth bailout money they got from the Fed in 2007/8. Wonder why Deutsche didn’t refuse those billions on nationalistic grounds…
With the stroke of a pen, Bill Clinton created Billions of workers to compete against everyone else in the world.
The solution to be tried very soon: Isolationism and Protectionism. Let the Chinese sell to Chinamen. Let Germans sell to Germans. Let Americans sell to Americans. Borders closed. International finance dies.
Do you think that that will be allowed to happen.
Well assuming reciprocity isn’t absolute, perhaps Draghi won’t succeed in sticking Germany with the eurodebt bill.
All I have to say is, if you’re guilty of lying, cheating and stealing, you’d better keep an eye peeled for karma searching you out.
In the good time the elites have their snouts in the trough sharing the spoils.
They gorge themselves and are as happy as pigs in sh*t.
When the going gets tough they start to squabble like children.
Their tit for tat retaliation has a nasty habit of escalating
1920s/2000s – high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation
phase
1929/2008 – Wall Street crash
1930s/2010s – Global recession, currency wars, rising nationalism and extremism
“You’ve put tariffs up, I’m going to put tariffs up”
“You’ve devalued your currency, I’m going to devalue my currency”
Before you know it.
1940s – Global war.
The Middle East is already on fire.
The US is becoming increasingly hostile to Russia and China with NATO forces swarming on the Russian border.
The nuclear super-power at each other’s throats, how much closer can we get before the holocaust?
Probably no point responding but briefly: NATO’s Reaction Force is now about 4000 combat effectives- somewhat inadequate to swarm the Russian border but serving as a trip wire. Russia can’t embark on Putin’s dream of reconstructing the USSR- the nightmare for all the previous Russian vassal states, on the cheap.
The question to ask about the Nato presence near Russia: why do all Russia’s neighbors fear Russia? Ask a Pole.
Re: China- it is Chinese grandiose claim to ocean territory claimed by over 6 other nations that has set off the latest tensions.
Re: connection between Russian and Chinese military adventures and chest beating- both are on the verge of severe economic crisis.
Russia’s is probably closer- it may run out of money by mid- 2017.
The average Russian spends half his income on food.
Incredibly the amount of state- owned enterprise has doubled under Putin to around 70%. It has gone backward.
Russia’s only remaining card to aspire to great power status is military. Scarcely a week goes by without Putin reminding us Russia is a nuclear weapon state.
China’s flame out may be more dramatic. In the last 8 years it launched history’s largest economic bubble- floated on history’s largest credit expansion. Based on import and export numbers this may be about to burst.
Both regimes are sorely in need of distractions from their mismanagement.
I agree with everything you said. The sad thing is there is a simple solution. It’s called debt forgiveness. All global debt can be forgiven and we can start over. The central bankers are not willing to consider debt forgiveness because it levels the global power playing field. American citizens don’t want to go to war and I doubt the Russian or Chinese citizens do either. Our leaders are going to do anything and everything necessary to win the global currency war. We elected them and they represent us so we are responsible for their behavior. Debt forgiveness is even biblical and the Bible warns debt turns people and nations into slaves and slaves typically revolt. The US political parties claim they represent Judeo Christian values so debt forgiveness can be a party platform and solution. The citizens of the world need to decide we want debt forgiveness for everyone now. The other option is we can keep bailing out/bailing in the banks and foot the bill for global war. What other option is available?
” It’s called debt forgiveness. ”
This topic is untenable and forbidden you will start all the jubilee propagandists and loonies screaming again.
Spreken Debt Jubilam ist Verboten.
Is the end of the world as we know it not a good thing? I thought the paper money was worthless anyway. Do you really think the pensions and social security are going to be available? They are a scam. Insurance is a scam. Banks are a scam. Debt forgiveness does not get rid of anything but debt. After the forgiveness then everyone has the option of renegotiating everything. If anything, it would cause massive growth for the banks, and insurance companies because most people would go right back into debt.
You dont see to understand that you are demanding all the little people who have scrimped for generations give their meager savings to you because you dont want to pay your bills but you want to keep what you do or dont have by getting them to pay for it.
Bankers wont write off the debt, without first lining their pockets, then stripping all savers of all their assets.
This BS jubiilee is the same story as always, a group of lazy violent takers, with pitchforks, run by some lazy intellectuals, out to steal a lot for themselves (Lenin, Stalin, Mao, Sanders) demanding, everybody give them, because they say so.
Read what wolf says about this, here andi n other thread’s, and think about it, debt forgiveness wipes out all assets. including those of the debtors.
The state/National administration, in bailing out the banks, will take ALL the land on finance.
The only entity that will have anything, will be the state, and it will be demanding, you work, to pay your taxes and debts to it, as the only debts not forgiven or eliminated by bankruptcy, are debts to the state taxes, fines student loan’s Etc.
BS judilee, is simply the demand of irresponsible debtors, that all responsible people be dragged into the pit, with them.
Effectively, you paid for yourself, now you pay for lazy irresponsible me too, because I say so, even if we all end up with nothing. As I am to lazy to work at something (Not Necessarily a job)and pay for myself, is the position you are advocating.
Then think on this, before you can get a global BS jubilee, you will need a 1 world government. To get it done all over the planet, at the same time, as that is the only way it could ever possibly work properly..
Think about a 1 world government controlled from Beijing for a while.
I am sure, as an American, you would like that idea.
BS jubilee, is simply another handout, to the taker’s..
“If anything, it would cause massive growth for the banks, and insurance companies because most people would go right back into debt.”
What bank’s.
A BS jubilee will wipe them, ALL, OUT.
And without banks. our modern society dosent function, for 1 second.
You need to understand: One person’s debt is another person’s income-producing asset.
Debt forgiveness means that like about $100 trillion in assets, or more, will be instantly wiped out. No pensions, no social security, no banks, no insurance companies…. They all own these assets and count on them to be there.
Oh, and no paycheck (because the credit system collapses instantly). No transactions, no trade, no ships, no planes, no cars…
What you’re proposing is the end of the world as we know it.
Mic drop.