Although its high hourly wage structure has led automakers to outsource production in eastern Europe and China, Germany has still maintained its international competitiveness in premium markets. Only a few years ago, the death knell was sounded for automotive suppliers and manufacturers in Germany, with reports of downsizing and production being shifted abroad to emerging eastern European countries and China, where labor costs are considerably lower than in the West. But now those forecasts of doom appear to be premature and unjustified. "The strong pressure to cut costs then led to a narrow minded focus on high labor costs here, but that view has widened considerably," said Jan Miller, a spokesman for Ernst & Young business consultants, who conducted a recent industry survey. "Other factors, such as our highly qualified workforce and innovative edge, are equally important. What has changed is the image of Germany as a production site. The hourly cost of hiring an industrial worker in the western part of Germany is the third highest in the world at 28 euros ($36), compared to 19 euros in the US and only 4 euros in Slovakia and Poland, according to the Cologne Institute for Economic Research. High labor costs, but unrivalled German infrastructure "Such high costs to the employer are a major drawback in Germany, but the tightly woven net of suppliers, services and high tech research, which supports the industrial core is unrivalled here," said Martin Leutz, spokesman for Gesamtmetall, an employer's association in the metal and electrical sector which represents the big players such as Siemens, Daimler-Chrysler and BMW, as well as mid-sized and small companies. "This kind of cluster structure, which allows for depth, diversity, streamlined efficiency and quick decision making, is hard to duplicate in other countries."
Only a few years ago, the death knell was sounded for automotive suppliers and manufacturers in Germany, with reports of downsizing and production being shifted abroad to emerging eastern European countries and China, where labor costs are considerably lower than in the West. But now those forecasts of doom appear to be premature and unjustified.
"The strong pressure to cut costs then led to a narrow minded focus on high labor costs here, but that view has widened considerably," said Jan Miller, a spokesman for Ernst & Young business consultants, who conducted a recent industry survey. "Other factors, such as our highly qualified workforce and innovative edge, are equally important. What has changed is the image of Germany as a production site. The hourly cost of hiring an industrial worker in the western part of Germany is the third highest in the world at 28 euros ($36), compared to 19 euros in the US and only 4 euros in Slovakia and Poland, according to the Cologne Institute for Economic Research. High labor costs, but unrivalled German infrastructure
"Such high costs to the employer are a major drawback in Germany, but the tightly woven net of suppliers, services and high tech research, which supports the industrial core is unrivalled here," said Martin Leutz, spokesman for Gesamtmetall, an employer's association in the metal and electrical sector which represents the big players such as Siemens, Daimler-Chrysler and BMW, as well as mid-sized and small companies. "This kind of cluster structure, which allows for depth, diversity, streamlined efficiency and quick decision making, is hard to duplicate in other countries."
Except that we designed expensive but nasty products nobody really wanted to buy. It's always been a british fault to flog the same old crap harder than build a better product that sells itself. Cost-cutting accountatns with pygmy imaginations were always cutting costs rather than improving product. keep to the Fen Causeway
High labor costs, but unrivalled German infrastructure "Such high costs to the employer are a major drawback in Germany, but the tightly woven net of suppliers, services and high tech research, which supports the industrial core is unrivalled here,"
"Such high costs to the employer are a major drawback in Germany, but the tightly woven net of suppliers, services and high tech research, which supports the industrial core is unrivalled here,"
Countries like Germany and Japan which have invested in workers and facilities are going to have a natural advantage to those like the US which have dismantled their industrial capibility and invested "cost savings" in militarism and cronyism.
Just because the quality of local relationships can't be measured with a neat single number doesn't mean those relationships aren't a huge influence on the bottom line.
