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Germany's days as an industrial superpower are coming to an end

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Re: Germany's days as an industrial superpower are coming to an end

#31

The article lists a lot of things going bad for Germany. But was there some underlying reason? Like demographics, shrinking population? Or is it just the obvious , Russian gas, rising Energy costs, now their prices are too high, so exports are down.

Several decades of politics and industry kicking the can down the road and hoping that the challenges go away by itself.

For example: German car makers are still somewhat reluctant to embrace electric motors (no matter the power source or storage) and would like to stay with combustion engines (no matter the combustible) because that's a niche they and the entire downstream industry feel comfortable with.

Yes, a large share of the industrial base in Germany hinges on it. But a long-term view on things would have started divesting from this exclusivity decades ago. Instead, they hoped the challenge just goes away by building better combustion engines. There's _finally_ some movement in that direction (Volkswagen embracing EVs is huge), but there are also still reactionary pockets that try to water everything down because hydrogen or synthetic fuels are right around the corner, just you wait! (possible, but very unlikely)

Another example from the industry: The chemical industry never hedged their reliance on fossils, either. While they will remain a consumer of fossils for chemical processes, the industry was comfortable just heating whatever they need to be really hot with them as well. Now they're scrambling to retool their factories to still use fossils where impossible to replace (e.g. fertilizer production uses the chemical properties) but to use hydrogen when stuff just needs to get hot. That the amount of fossil fuel might go down was _kinda_ obvious with all those CO2-reduction targets, but they preferred to wait it out.

I see more hope with them, though: they need to retool, but after the furnaces use hydrogen (wherever that comes from), they can do business as usual (and gradually optimize hydrogen sourcing). The car industry (some say that 20% of the German industrial base rely on that directly or indirectly) is much worse off.

Another example, this time politics: Deutsche Bahn (DB) is a private company fully owned by the government. There's some money going back and forth between the company and its owner, but one of the arrangements was that DB pays for maintenance of its infrastructure itself, but catastrophic loss of infrastructure (and related repairs/rebuilds) are covered through government money. What is the private company (that was expected to pay some 8-9 digit sums of earnings back to the federal budget for years as part of that back-and-forth) doing then? Cut down on maintenance. When stuff breaks entirely, repairs aren't on them, so that's the "rational" choice for the company. Politicians were asleep at the wheel as far as these incentives are concerned (or worse: they calculated with them, kicking the can down the road.)

There are advocates for moving more logistics from the road to rail, but that's kinda stuck because there's a huge repair-and-investment plan right now (to deal with that oversight of decades) that will block various key routes for the next few years.

And it's not as if the Autobahn-network is any better off (map with construction sites at https://www.autobahn.de/die-autobahn): lots of bridges from the 60s reaching their end-of-life all at once because maintenance is an expense that was better ignored (since politicians decided that above all else, the country mustn't increase its debt: So we had a kinda-balanced budget but accrued the steel-and-concrete equivalent of tech debt)

Re: Germany's days as an industrial superpower are coming to an end

#32

Anecdata: investment in robot and 3D builders is ramping up in Germany in response to labour shortages and increasing costs. Source: a German friend in the sector. I guess it’s good this issue is being openly discussed. Having a good problem statement is always a good start. By contrast in the UK, deindustrialisation of the 80s/90s/00s was not a massive political topic. And the ensuing enshittification of the economy…

UK economy isn't shit, still a very wealthy country. The problem is that the ratio of productive to unproductive has shifted significantly.

Look at how many lawyers, civil servants, other government workers, management consultants the UK can afford to support. Housing hundreds of thousands of economic migrants for free. That is a rich economy. The problem is that the productive section of the economy isn't growing (and a lot of the unproductive activities, for example paying lawyers hundreds of thousands per year to block industrial development, are blocking growth).

The same is true of Germany. Of almost every economy in Western Europe bar NL.

There is no "labour shortage"...I don't even understand how that is supposed to work. There is a price for labour, if you can't pay it then you will go out of business. Companies: refuse to train staff, complain that no-one is trained, rely on mass importation of migrant labour, and then also complain that they can't afford to pay more (when they refuse to hire any higher-skill staff who can actually improve productivity)...these aren't real problems. Economic inactivity rates are sky-high across Western Europe WHILST companies say there is a labour shortage. Who believes this?

Deindutrailisation was an absolutely huge political topic in the 80/90/00s. It was probably the biggest economic topic throughout the 80s. The "enshittificaton" caught no-one by surprise apart from politicians who believed that the 2000s (specifically) were a time of massive prosperity (you still see this, Starmer goes on continuously about how wonderful the 2000s were, great time for laywers/bankers/landlords, people like him). Throughout the 90/00s, they pumped government jobs into these areas...and are now surprised that everyone else has run out of money to support these people doing nothing? (Same thing has happened in Germany with the East btw, same thing in France, Italy, Spain).

I agree that identifying the problem is the issue but it is far deeper than deindustrialization (the discussion of which got us here because the "solution" was: mass government intervention into certain areas to try and boost the vote for whatever party thought they could win...it should be no coincide that elections in the UK are now won and lost in the areas of "deindustrialization" AND nothing happens to fix these areas beyond politicians promising a mystery box full of cash).

That this is happening simultaneously in many Western European countries and other developed countries should be the clue that it is cultural.

Economic growth has never been easier, costs have never been lower, potential has never been higher. People should ask why we are circling the drain even more rapidly whilst other countries are smashing it.

Re: Germany's days as an industrial superpower are coming to an end

#34

The article lists a lot of things going bad for Germany. But was there some underlying reason? Like demographics, shrinking population? Or is it just the obvious , Russian gas, rising Energy costs, now their prices are too high, so exports are down.

There is plenty of migration from south and Eastern Europe into Germany so demographics is not an issue.

Re: Germany's days as an industrial superpower are coming to an end

#36

The article lists a lot of things going bad for Germany. But was there some underlying reason? Like demographics, shrinking population? Or is it just the obvious , Russian gas, rising Energy costs, now their prices are too high, so exports are down.

Demographics. The Baby Boomers have started to retire. Population is aging, birth rates are low, labor pool is shrinking.

But why would people retiring cause plants to close.

The article talks about layoffs.

But if they are having layoffs, and people can't find work, that would indicate they do have workers, not a shortage of workers.

Re: Germany's days as an industrial superpower are coming to an end

#37

The article lists a lot of things going bad for Germany. But was there some underlying reason? Like demographics, shrinking population? Or is it just the obvious , Russian gas, rising Energy costs, now their prices are too high, so exports are down.

I'd say the main problem is "leadersh*t", incompetent captains of industry. It's so pervasive and prevalent that I really don't see any hope for them. People are also getting more and more unprofessional and expect high pay for subpar results. Devs on the other hand are hugely underpaid and the country operates in a two caste system of managers vs everybody else though not as badly as the UK. There is also a high ave…

Any traditional industry/company in Germany approaching "computers", "the web", "smart something" doesn't want to pay properly for devs. Mostly because the leadership in their late 50s (at best) has some nephew who is "good with computers" so it can't be that hard. You get senior electrical engineers laying down some bonkers architecture for how the software side is gonna work, and then two BSc CS graduates thrown at the job, representing the whole dev department.

Anecdotal!

This was about a decade ago, suddenly ran into a guy I knew from highschool who studied CS in another city. Told me he dropped out during his master's because he failed math, then got hired by a medium-sized company making sensors and actuators, who now wanted to enter the smart home business. Remote controllable relays for power outlets basically, energy meters, door-open sensors, not much more at that point. He was basically the only dev for the first six months, then got promoted to team lead and had two other devs working for him.

He was inexperienced and had quite the ego when I talked to him back then. He was smug about using Arch Linux while I was on debian. He then went on and excitedly told me "did you know!? you can't just use ssh to get a shell on another computer, but tunnel arbitrary data over it!" I guess you don't learn much just copying commands from the Arch Linux wiki all day. Anyways, when I told him I don't think this project will go anywhere and will pretty much be done once Google or any other big player decides to enter that space, he just brushed it off because "they will have been there first". Needless to say, he's not with that company any more, but not after suffering some burnout... Two years after college!

Re: Germany's days as an industrial superpower are coming to an end

#38
One of the myriad issues mentioned in that article is that Germany's workforce is not going to be able to sustain the economy after some years.

What is the cause of that?

There is plenty of immigration and with cost of living having been fairly low in many places in Germany for the last two decades, plus the economy booming in that time, why is there a lack of workers now (+-5-10 years)?

Re: Germany's days as an industrial superpower are coming to an end

#39

Earlier quoted context omitted.

> People are also getting more and more unprofessional > the country operates in a two-caste system I don't know for today but I remember in the 1980' some German engineers playing games on their computers during work at Deutsch Telecom.

An accounting professor of Turkish origin in my MBA program in the US was making fun of Germany after the Wirecard scandal that he could have imagined such crime in Turkey but never in Germany and then shrugged his shoulders.

Just look where Marsalek comes from: We import our criminals from Austria.

Re: Germany's days as an industrial superpower are coming to an end

#40
post #9
post #3

I feel I've seen this movie before.

what?

You know, the one where Germany is falling in stature on the international stage so it pulls itself up from it's bootstraps so it can once again rise up to an international superpower. I forget the title. I think they made a sequel.
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