|
::: Full steam ahead for GERMANY'S ECONOMY
THE DOSSIER of Giovanni Carlini
-----------------------------------------------------------
The European
Federation of the
Parquet Industry
(FEP) revealed,
during the general
assembly held
in Rome on May
28th, the 2009
data for
this sector.
A couple of years ago, I wrote
a report on Germany for
Professional Parquet entitled:
“A locomotive waiting in the
station” .The overall picture has
changed in a short space of time:
that locomotive is now charging
full steam ahead through Europe.
I do not intend to add here to all
that has already been published on
this subject, because I have another
goal: the sociological aspects.
Germany’s economic success has
social roots. Sociology in business
serves to link the common
rules of a community with the individual
needs of people. When
this happens, employees work
better and produce more.
The German phenomenon is usually explained with numbers / economic
aspects, but never on a
human level, though this is the
true driving force.
Not that the Germans have invented
anything new - this matter
has been debated for 80 odd
years in the U.S.A. - but the Germans
have managed to interpret
it in trade union terms.
The “Harz package”, described
below, has only been made possible
because sociology has been
applied for many years in German
companies.
 ::: THE GROWTH OF THE 'GERMAN SYSTEM'
Germany’s economy rose in terms
of GDP by 2.2% in the second quarter
of this year, compared to forecasts
of just 1.3%. Year after year,
Germany has seen a 4.1% rise in its
social wealth, i.e. more than twice
as much as the Eurostat estimates
for the entire EU area.
Underpinning this success are not
only its exports (the most immediate
sign), but also structural development,
originating from the
choices taken immediately after
reunification in 1992.
In fact, Germany is now enjoying
its highest rate of economic
growth since reunification, basically
because the crucial steps in
the re-organization of its manufacturing system are now bearing
fruit and that system is, of course,
the strongest in Europe.
The key points? Medium-sized enterprises
are better equipped to
survive on the global market, as
we have seen both in Asia and the
Americas, where economic recovery
is currently stronger than in
Europe. These regions are better
able to bear the costs of internationalization,
have better logistics
owing to the way their sales networks
are structured (thus encourage
the setting-up of new
companies) and excel in maintaining
business relations. What’s
more, German industry has concentrated
in areas less exposed to
competition from developing
countries, thus avoiding those
goods where the dynamics of demand
are traditionally lower and
competition fierce.
Exports of machinery to emerging
countries is one of Germany’s
strengths. Controlled relocation
has taken place - not without
some difficulty - towards Eastern
Europe (Poland, Slovakia, the
Czech Republic and Hungary)
concerning labour-intensive areas
of manufacturing, those that normally
affect a company’s competitiveness.
The application of the so-called
“Harz package” in the employment
laws has proved crucial.
These have introduced a new
comparative scale for assessing
industrial relations, taking into account
real wages, employment
levels, investment in fixed and intangible
assets and productivity.
In other words, these factors are
no longer independent variables and the State provides significant
support for German exports.
::: TRADE UNIONS FAVOUR DEVELOPMENT
Apparently obvious, but anyone
wanting to imitate the “German
model” should realise that the starting
point is not the act of production,
but a company's ability to
entertain and introduce social relations
(employees proud to be such
and with a mission) and industrial
relations (discussions with trade
unions concerning more than just
the workers’ salaries, but their
quality of life in the workplace. See
“Harz package”).
Trade unions in Germany have accepted
and supported the “salary
cages”, i.e. salaries varying according
to the cost of living in each geographical
area. This is one of the
secrets of German success.
In a recent survey comparing East
and West Germany by the IFO Institute
in Munich (published in
September on the “Super Illu”
magazine), it emerged that the
rise in GDP in East Germany in the period 1991-2009 was twice
that seen in West Germany (12%).
The mean income for a family in
East Germany has gone from
10,900 Euros at the fall of the Berlin
Wall (then only 35% that in West
Germany) to 19,500 Euros in 2009
(53% of that in the former West
Germany). Again, in 2009 East German
workers’ salaries were worth
83% compared to those paid their
colleagues in the West (57% in
1991). With these parameters, unemployment
figures in the former
East Germany have now fallen below
the one million mark for the
first time since unification, but the
percentage is still high (11.5% in
August 2010, compared to 18%
years ago; 6.6% in the West).
Obviously, the whole process has
been supported by major public
investments, aimed at renewing
the infrastructure in both sectors
- production and services - in the
former DDR.
20 years after reunification,
labour costs in the former East
Germany may well still be lower
than in the West, but this is not
the only reason why some sectors
in the East are more competitive.
::: THE ROLE PLAYED BY THE EURO
When considering Germany, another
factor must be taken into
account: the importance of the
Euro benefitting the German economy.
Every study to date - in any
paper, magazine or journal - tends
to neglect this aspect, even
though this is fundamental to the
German industrial system. In fact,
Germany’s economy depends
heavily on its exports. Two thirds of the total rise in demand seen in
the German economy and its manufacturing
system came from overseas
in the period 2000 - 2008.
As a result and in view of past
events, Germany had two strategic
needs: markets closely tied to
its domestic needs, despite being
trapped by the Deutsche Bundesbank
and its policies, and a competitive
exchange rate for operations
outside the EU.
The Euro has met both these
needs, proving itself to be a real
godsend for Germany, if not so
much for the rest of Europe. This explains and justifies the widespread
distrust of the Euro and the
rumours that Member States would
welcome a return to their national
currencies, using the single currency
only in foreign transactions.
Complications arise if we do not
accept a reduction in the role of
the Euro in our individual national
lives. Since the Euro became the
official currency of the European
Community, several economic
crises in countries along the German
border have had the effect of
bringing the value of the common
currency down. While meaning an
advantage on the global markets,
it has also humiliated the individual
economies of Germany’s trading
partners. These are worth two-
fifths of German exports, i.e.
nine times more than Germany exports
to China.
The method pursued to empty the
economies of Europe in Germany’s
favour is quite simple. European
products are still not competitive
on the Central European market, especially
after a decade of rising
costs. If we consider for a moment
what might have happened if it
were not for the Euro, the exchange
rate with the German Mark
would have literally skyrocketed
and all the other currencies would
have been devaluated in order to
compete. This would have
“killed”the German economy,
which is, instead, strong and prosperous
today. Devaluation of Germany’s
neighbouring national currencies
would have been substantial,
at least as much as that of the
pound. The fact that this has not
happened has greatly benefitted
Germany’s prospects in Europe.
::: THE COST OF GERMAN REUNIFICATION
The timing and cost of reunification
offers us a good example of
what has happened in Germany.
20 years on, after spending some
75 billion Euro from 1991 to 2009,
there are now virtually no differences
in living standards between
the two former countries. Investments
have been made in constructing
and repairing the roads,
motorways, railways, canals and
other infrastructures, as well as
boosting wage levels.
Exceptional commitment and
tenacity over the past two
decades has led to a virtuous cycle
of integration and Germany is
now re-emerging, more positive
than negative. It has certainly less
debt than the United States and is
more industrialized than Great
Britain.
Everything is now ready to make
up for the 1900s, which, according
to Raymond Aron, should
have been “the German century”.
::: THE INTERVIEW
“Professional Parquet International”
has been introduced to Germany
by the Hamberger Group
(www.hamberger.de) based in
Pressestelle, 60 km south-east of
Munich.
Active since 1950 as the Hamberger
Group, the company’s fortunes
are the result of some daring business
tactics by the Hamburger family
in the wooden flooring sector.
This important German parquet
manufacturer has a very original
trade policy and provides a good
example for Italian business: Hamberger
does not care about the rest of the world, but is simply interested
in cultivating contacts
that enable it to export. In practice,
a “one way” policy.
The company manufactures for
the German and overseas markets,
but is not prepared to share
the Central European market
with others wanting to introduce
other types of wood flooring, no
matter what their origin. Such a
strong position merits some consideration.
 How many years have you been
producers?
Peter Hamberger: Our company’s
history goes way back to 1866
and so today we are among the
leading manufacturers in our
country. Not only that, but we are
also celebrating the 60th anniversary
of our most successful
brand: Haro parquet. This is
thanks to the Hamberger family
heading the company for three
generations.
What kind of flooring do you
produce and sell? Is wooden
flooring your core business?
Peter Hamberger: We produce
some 15 different types of flooring without importing any, which
is a matter of pride for us. The
most important are our oak
floors, accounting for 50% of our
production, beech (25%), ash
(5%) and maple (7%). Laminated
parquet represents 93% of all we
produce. Parquet is our core
business, but we also produce
linoleum, laminate floors and Celenio
wooden tiles.
Is there an association of parquet
producers in Germany?
Peter Hamberger: We rely on a
professional organisation: VDP
Verband der Deutschen Parkettindustrie
(www.parkett.de). We are
very pleased with the work of this
organisation, which is always a
point of reference for us.
What have your parquet production/
sales been like these
past 3 years?
Peter Hamberger: Without providing
any definite figures, we can
confirm that in 2009 we sold 5.1
million square meters of flooring.
Do you know whether German
parquet manufacturers appreciate
contacts with their foreign
colleagues and, if so, what
is the value of German parquet
imports/exports?
Peter Hamberger: There is a
strong tendency on the part of
the German manufacturers to create
products that are competitive
on foreign markets, meaning that
we are far more interested in foreign
markets as exporters than as
importers. High quality products,
like Italian parquet, are, of course,
a case apart.
Does the German government
help your business?
Peter Hamberger: Unfortunately
not, as in the rest of Europe. We
have to rely on our wits!
Which countries do you export
to?
Peter Hamberger: We export to
90 different countries around the
world, exports accounting for
40% of our turnover.
Does Chinese production of
bamboo or low cost parquet
worry you?
Peter Hamberger: Chinese production
as a whole bothers us,
but we prefer to take steps not
at a customs duty level, but at
the consumer level, by educating
consumers to see the "Made
in Germany" label as a guarantee,
preferable to taking a risk, a
bet on something that might
seem to work, but quickly
proves fallible.
Is parquet used in German
homes? Approximately what
percentage of a typical apartment
is usually fitted with
wooden floors? What about hotels
in Germany?
Peter Hamberger: We have no data
on German hotels, but we can
say that, on average, parquet accounts
for 5.8% of all floors in residential
buildings in Germany.
Who is your contact for European
operators interested in
doing business with you?
Peter Hamberger: Our sales director,
Rupert Englmaier, by
phone or email.
|
Keep up-to-date on latest developments with Parquet International ...
All the latest products and services in the Professional Parquet showcase ...
Go to reserved