This is an article you must, must, must read if you have any interest in economics or at least in improving America's economic performance. We could learn a lot from the Germans.
from American Prospect, February 24, 2010
. . . .
As viewed by orthodox American economists, the patients are running the asylum. But few aspects of the German model seem more secure than this system of co-determination in corporate governance. German corporations have consistently increased their global market share over the years. In the steel industry, for instance, ThyssenKrupp now outproduces United States Steel 3 to 1. In the electrical industry, Siemens is a bigger exporter than ever, while General Electric long ago shuttered most of its American factories in a controlled retreat into outsourcing and diversification.
Then there is Germany's performance in the automobile industry. Volkswagen, Mercedes-Benz, Porsche, and BMW remain at the top of their game, even as Detroit has been brought to its knees. In the last year, a German government "cash for clunkers" program -- the model for the U.S. program introduced last summer -- proved highly effective in supporting domestic demand. In export markets the German carmakers really show their mettle. In a normal year, BMW, for instance, sells three times as many cars abroad as at home. Overall, the German industry accounts for a global market share of about 17 percent -- not bad for a nation with just 1.2 percent of the world's population. Admittedly, about half of German-brand cars are produced in foreign assembly plants, but such plants rely heavily on German-made components.
Even in services, where the American model is supposedly indisputably superior, German corporations don't seem at a serious disadvantage. In the airline industry, for instance, Lufthansa is still airborne after more than 80 years, while its once much larger and more powerful American rivals on the Atlantic route, Pan Am and TWA, have long been grounded. Lufthansa ranks sixth in the world in passenger miles and has been expanding by acquisition in Austria, Switzerland, Britain, Belgium, and the U.S. (where it has bought a 15.6 percent stake in JetBlue).
http://www.prospect.org/cs/articles?article=Germanys_economic_engineGermany has a relatively strong manufacturing sector as the American Prospect article explains, not the least because workers of big companies are entitled to elect representatives to sit on the board and vote on a limited number of issues.
Here is some even more recent and very positive news about Germany's manufacturing sector.
BERLIN, March 24 (Reuters) - German manufacturing output growth surged ahead in March while service sector activity picked up speed, a survey showed on Wednesday, pointing to a stable footing for recovery in Europe's largest economy.
A flash estimate of the Markit purchasing managers' index (PMI) for the manufacturing sector jumped to 59.6 from 57.2 in February, with activity expanding at its fastest rate since April 2000.
Sub-components tracking output, new orders and foreign demand grew at their quickest pace since the survey began in 1996, suggesting the boost would feed into the wider economy.
"It's not a hiccup -- new orders remain elevated and that suggests we will see ongoing growth in manufacturing and that should help sustain the services sector," said Chris Williamson, chief economist at data compiler Markit.
http://www.forexyard.com/en/news/Manufacturing-surge-boosts-German-economy-in-March-2010-03-24T083004Z
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