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Forum Post: How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much

Posted 2 years ago on Jan. 10, 2012, 6:48 p.m. EST by malikov (443) from Pasadena, CA
This content is user submitted and not an official statement

Mund points out that this goes

against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.

As Michael Maibach, president and chief executive of the European American Business Council, puts it, union-management relations in the U.S. are “adversarial,” whereas in Germany they’re “collaborative.”

http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/

34 Comments

34 Comments


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[-] 6 points by demcapitalist (977) 2 years ago

Collaboration with unions would not work with America's supply siders. They are convinced that supply and demand can work without demand. No wonder the American economy is a mess and dependent on debt financing, every time they get proven wrong they somehow turn it around and insist on more gifts and privilege for the supply side and they get the votes that change the laws. How I just don't know. It's sad, America used to have respect for the people who make things and we used to make wonderful things.

[-] 3 points by alexrai (851) 2 years ago

lol, yes. "Supply and credit card debt."

[-] 1 points by demcapitalist (977) 2 years ago

Touche'

[-] 1 points by AmuroRay (45) from Seattle, WA 2 years ago

"the consumer doesn't know what he wants until we show it them" - Steve Jobs

Supply creates its own demand. Because when you increase production the price will fall. Supply side economics worked, we cut taxes and printed money hence the dollar got cheaper. Don't forget 2/3 of the American Economy is driven by the consumer... thats not a good thing.

[-] 1 points by BLUTODOG (111) 2 years ago

"Supply creates its own demand." Nonsense. Price is not and never has been the "only" driver of demand. That kind of simplistic reasoning reduces people to robots that merely buy something when a certain price pt. is presented. If that was the case there wouldn't be any need for the massive amounts of $$ spent on marketing and advertising. In fact demand for an object or a service can be created without any consideration for the price or very little. Apple products are a perfect example of this. People by them when their competitors products are a third of the price. Under your theory Apple stock price should be near zero because they way over price their stuff. Supply is just one factor in the creation of demand and not always the most important one.

[-] 1 points by demcapitalist (977) 2 years ago

How would you know if supply side economics worked? Reagan had the printing presses up and running from day one. Yes selling Gov bonds and dumping the money into the economy works, why wouldn't it? It's just not a permanent solution, it's the only one we have used for 30 years. It never really turns the economy around it just delays the recession ---and we have delayed it now for so long that the skilled Americans we had are retired or dead.

[-] 1 points by AmuroRay (45) from Seattle, WA 2 years ago

We've been in a industrial depression since Paul A. Volcker.

Reagan might have worked better if he raised tariffs, and added HUGE excise taxes to luxury items.(Yatchs, Jets, Mansions). But who knows if you want to know how to get out just read some of Alexander Hamilton's, Henry C Carey, or Friedrich List then build from their.

[-] 1 points by brightonsage (4494) 2 years ago

Good point, well said re supply and demand.

[-] 3 points by Builder (4202) 2 years ago

German ability is legendary. So is their work ethic.

A highly industrialised nation full of hard-working people is hard to match for output.

[+] -4 points by shadz66 (19985) 2 years ago

Please do NOT underestimate their belief in notions of "Community ; Society and 'The Common Good'!!" either.

The Germans have an active 'Left', Strong Unions and avowed Communists and Socialists amongst their Elected Political Representatives and throughout their Society at large.

Its NOT just their "Work Ethic" ; It's their avowed and explicit belief in their "Society" and their quite and implicit, "Socialism and Sociability" that are their strengths.

Vorwärts und Solidarität für alles !!!

[-] 1 points by Builder (4202) 2 years ago

I hosted three German volunteer workers under a scheme where they can opt to do their National Service in the military (paid six months work) or go to other countries and help those less fortunate than themselves. The scheme has since been cancelled, but those three twenty-year olds were surprisingly immature and inexperienced, when compared to Australians of a similar age and parental income bracket (middle-class).

Perhaps this is akin to our many youth of today, meaning lethargic and dependent? I don't know. Hard to get a good picture from only three people.

[-] -1 points by Misfit138 (172) 2 years ago

They are also still extremely racist and prejudiced which helps fight back diversity and keep their communities closer. I was shocked at how open they were when belittling and discriminating against non-whites.

[+] -6 points by shadz66 (19985) 2 years ago

I have to say that my experience of Germany and German Cities in particular (I first visited in 1979) does NOT corroborate your assertion. Of course racism exists but there is also very strong anti-racist sentiment. Nowhere is perfect but Germany is on the whole, pretty good. Tschuss ;-)

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[-] 2 points by PublicCurrency (1387) 2 years ago

Germany doesn't maintain military bases in nearly every country in the world. They are not killing people in 7 countries. They are not supporting a behemoth 'Military Industrial Congressional Complex.' They didn't bail Wall Street 'bankksters.' That should save a substantial amount of money.

[-] 1 points by bill1102inf2 (357) 2 years ago

FTW!!!!

[-] 2 points by PublicCurrency (1387) 2 years ago

agreed !

[-] 1 points by FrogWithWings (1367) 2 years ago

They are also patriotic and tend not to outsource everything in the name of saving a few dollars on durable goods for the maximum profits of multi-nationalist wealth extractors.

I know many there were down right not happy when factories were built in the USA and even in China to build "German" cars or motorcycles. And they should be unhappy about it.

Here, we let any nationalists come and buy land and give them all manners of incentives to provide crappy jobs which do not pay living wages, witness Nissan's history in this country. They started out paying good wages, and now try getting a job there making 14/hr with no bennies.

The list of similar is quite long.

China on the other hand, will allow a manufacturer to sample and test their market. At some point early on, the Communist government forbids them from importing any more product and forces them to either license to somebody there or build a factory in China.

No such protectionism here.....

[-] 1 points by opensociety4us (914) from Norwalk, CT 2 years ago

Germany is an anomaly. The only way for the US economy to be competitive, economically vibrant and provide the "American Dream" opportunity for its citizens is to lower its standard of living to those of the countries which have the cheapest source of labor.

The whole point of competing economic system philosophies is to find the one that provides the lowest standard of living for its participants (or is it the one with the highest standard of living for its participants? I don't know)

[-] 1 points by FrogWithWings (1367) 2 years ago

Or close our trade borders and play hardball like we used to do with no more bending over for the multi-nationals.

[-] 1 points by opensociety4us (914) from Norwalk, CT 2 years ago

Or how about free and fair trade? If a US business wants to manufacture their product in a country with a lower standard of living than the US, then they should not be able to sell that product in the US.

I hope the absurdity of my previous post above clued you in to the sarcasm.

[-] 1 points by FrogWithWings (1367) 2 years ago

Multi-nationalists want to exploit cheaper non-American labor, the unemployed Americans have now realized the error.

Free trade, nah, protect our trade borders and American jobs while this food producing nation dictates our own trade terms with any other nations.

We should not have a trade deficit with any other nation, especially not a Communist one.

[-] 1 points by opensociety4us (914) from Norwalk, CT 2 years ago

free and fair trade

[-] 1 points by FrogWithWings (1367) 2 years ago

I may see it different than you in light of the state of our nation and the large number of those unable to make a living wage. Fair trade means we can drop tariffs when Americans are all working and heavy hand any other nations whose agenda or net effects compromise taking care of America first.

[-] 1 points by WatTyler (263) 2 years ago

It used to be, and may still be, that it was an issue of law that unions were given a seat on the board of directors of German corporations. An old European proverb: “Don’t p**s in the soup, we all have to eat it.”

To what degree German industrial policy is a product of German sensibilities, and to what degree it was influenced by losing WWII and having to rebuild from scratch with the U.S. occupying administration looking over their shoulders is an interesting question to which I don’t have the answer. Perhaps the solution for America is to declare war on ourselves, and immediately surrender. Frankly, I’m beginning to lose hope that anything less than beginning with a clean slate will produce meaningful reform.

[-] 1 points by BLUTODOG (111) 2 years ago

"They are convinced that supply and demand can work without demand." I don't quite agree. I think they believe that mass American demand isn't necessary. If your not interested in cultivating a "middle class" and the mass consumer spending model then "demand" isn't a s much a concern. You see this in their focus on what people own. They're always telling us the poor today have this or that therefore in their view they aren't really poor. Plus, many of these folks are no longer connected to the American worker and see the American work force as just another pool of labor available and in their view one that is still too expensive.

[-] 1 points by Misfit138 (172) 2 years ago

They are comparing BMW, Mercedes and VW (partnered with Porsche) to Chevy, Ford and Dodge. BMW, Porsche and Mercedes run more than twice the price of the US cars, so it would stand that their employees would make more than twice as much to build such high end cars. US auto workers are automation line monkeys while those top end German cars actually have human hands touch them. You pay a premium for the detail put into the vehicles while the US manufacturers mass produce crap in Mexico and Canada and pay someone here to run the assembly line. Apples to oranges.

[-] 1 points by FrogWithWings (1367) 2 years ago

Well here, the socialists want to pay businesses to hire Americans since the welfare road construction plan failed to gain support. It seems like it would be much better to simply tariff imports from any with which we have a trade imbalance.

http://occupywallst.org/forum/15-years-for-racist-obama-to-get-a-clue-that-even-/

[-] 1 points by beautifulworld (21588) 2 years ago

To think, a society in the 21st century looking out for the little guy, the worker. We can do that here too. This proves all the troll talk about how wages must be kept down for low level work, blah, blah, blah is such crap. Can someone send this to aries?

[-] 1 points by brightonsage (4494) 2 years ago

The German model is one we should be studying. American exceptionalism is sometimes exceptionally unbelievable short sightedness. This is one of those cases. Labor-management collaboration was the Japanese advantage over us. Total Quality Management (Kaisen). We learned that lesson and build product as well or better than they do, now.

We seem to be culturally hung up on adversarial relationships. We will do it our way even when the results are demonstrably worse. My wife would say, "Stupid men."

[-] 0 points by opensociety4us (914) from Norwalk, CT 2 years ago

Germany is an anomaly. The only way for the US economy to be competitive, economically vibrant and provide the "American Dream" opportunity for its citizens is to lower its standard of living to those of the countries which have the cheapest source of labor.

The whole point of competing economic system philosophies is to find the one that provides the lowest standard of living for its participants (or is it the one with the highest standard of living for its participants? I don't know)

[-] 0 points by slammersworldisback (-217) 2 years ago

yeah...they do it because they have markets where people will pay a premium for their automobiles......

all the social democracies of Europe, most falling like dominos under their inequitable systems, exist only because the US and it's (mostly) free market exists....

Why do you think they are adversarial in the US.....that is a rhetorical question..I already know what you're going to say..."greed"...and you are correct, the greed that presumes a man with an air hammer standing around all day tightening a series of bolts merits a $35 an hour salary for that effort, and the thug mob tactics of the unions that force that wage on the employer....THAT is greed

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[-] -1 points by FreedomIn2012 (-36) from Hempstead, NY 2 years ago

And Germany craps all over its EU partners. It exports to them are way out of balance. So Greece, Spain, Ireland, et al are paying for Germany's success!!

[+] -6 points by ZenDogTroll (13032) from South Burlington, VT 2 years ago

well take that, repelicans . . .

[+] -6 points by GirlFriday (17435) 2 years ago

This is not the first time that I have heard of this and I do think that it has the capacity to work well in the US. As the article points out, this changes when they come to the US because the companies can get away with it.